A Research Of Management Governance And Corporate Failure

It's the first time in Chinese academia.The paper combines board governance with managerial governance as a whole concept for discussing determinants of corporate failure,diminishing the effect from agency relationship.The paper provides a research of 50 Chinese special treated(ST)companies dating from 2005 to 2017 in small and medium-sized(SMS)listed companies of Shenzhen Stock Exchange.By using structural equation model(SEM)as empirical research method,endogenous variables,exogenous variables and errors are fully considered.The paper investigates managerial power and management characteristics as two aspects for measuring management governance.The study chooses board size,board independence and CEO duality as indicates for managerial power,while choosing management educational level,tenure and age as indicates for management characteristics.As a result,there is a positive association between managerial power and firm performance,while a negative association is found between managerial power and corporate failure.Board size,CEO duality indicate a positive association with firm performance,while board independence shows a negative impact on it.Their impact on coporate failure shows the contrary.Management educational level,tenure and age,which are indicates for management characteristics,show uncorrelated relationship with firm performance.In other words,no significant correlation is found between managerial characteristics and corporate failure.In brief,management governance has a positive impact on firm performance and a negative one on corporate failure.