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How much do the characteristics of independent directors and supervisory board members affect firm performance in China?

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  • Xu, Hongmei
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    Abstract

    This paper investigates and compares the characteristics of independent directors and supervisory board members in Chinese listed firms. The occupational backgrounds of independent directors and supervisory board members in listed firms are very different. Besides, different firms have different preferences in employing independent directors and supervisory board members according to their demands. Moreover, the empirical results show that characteristics of independent directors and supervisory board members have no clear relationship with firm performance. No matter their professional backgrounds or age, the independent directors and supervisory board members do not have the authority to affect the decision making process of management. Thus they cannot really contribute to firm performance. -- Die vorliegende Studie untersucht und vergleicht die Merkmale von unabhängigen Direktoren und Aufsichtsratsmitgliedern in börsennotierten chinesischen Unternehmen. Der berufliche Hintergrund der unabhängigen Vorstands- und Aufsichtsratsmitglieder in börsennotierten Unternehmen ist sehr verschieden. Verschiedene Unternehmen haben auch unterschiedliche Präferenzen bei der Beschäftigung von unabhängigen Direktoren und Aufsichtsratsmitgliedern je nach ihren Anforderungen. Außerdem zeigen die empirischen Ergebnisse, dass die Merkmale von unabhängigen Vorstands- und den Aufsichtsratsmitgliedern in keinem klarem Zusammenhang zum Unternehmenserfolg stehen. Unabhängig von ihrem professionellem Hintergrund und Alter haben weder die unabhängige Direktoren noch die Aufsichtsratsmitglieder ausreichenden Einfluss auf die Entscheidungsprozesse des Managements. Folglich können sie nicht wirklich zum Unternehmenserfolg beitragen.

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    Bibliographic Info

    Paper provided by University of Münster, Institute for Organisational Economics in its series Discussion Papers of the Institute for Organisational Economics with number 12/2013.

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    Date of creation: 2013
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    Handle: RePEc:zbw:umiodp:122013

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    1. Caspar Rose, 2005. "The Composition of Semi-Two-Tier Corporate Boards and Firm Performance," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(5), pages 691-701, 09.
    2. Niclas L. Erhardt & James D. Werbel & Charles B. Shrader, 2003. "Board of Director Diversity and Firm Financial Performance," Corporate Governance: An International Review, Wiley Blackwell, vol. 11(2), pages 102-111, 04.
    3. Choi, Jongmoo Jay & Park, Sae Woon & Yoo, Sean Sehyun, 2007. "The Value of Outside Directors: Evidence from Corporate Governance Reform in Korea," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 42(04), pages 941-962, December.
    4. Agrawal, Anup & Knoeber, Charles R, 2001. "Do Some Outside Directors Play a Political Role?," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 179-98, April.
    5. Byrd, Daniel T. & Mizruchi, Mark S., 2005. "Bankers on the board and the debt ratio of firms," Journal of Corporate Finance, Elsevier, vol. 11(1-2), pages 129-173, March.
    6. Pascal Gantenbein & Christophe Volonté, 2011. "Director Characteristics and Firm Performance," Working papers 2011/11, Faculty of Business and Economics - University of Basel.
    7. Bai, Chong-En & Liu, Qiao & Lu, Joe & Song, Frank M. & Zhang, Junxi, 2004. "Corporate governance and market valuation in China," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 599-616, December.
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