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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

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.

Suggested Citation

  • Xu, Hongmei, 2013. "How much do the characteristics of independent directors and supervisory board members affect firm performance in China?," Discussion Papers of the Institute for Organisational Economics 12/2013, University of Münster, Institute for Organisational Economics.
  • Handle: RePEc:zbw:umiodp:122013
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    References listed on IDEAS

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    1. 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 179-198, April.
    2. 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.
    3. 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.
    4. Gantenbein, Pascal & Volonté, Christophe, 2011. "Director Characteristics and Firm Performance," Working papers 2011/11, Faculty of Business and Economics - University of Basel.
    5. 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, April.
    6. 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.
    7. 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, September.
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    More about this item

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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