Author: Kao, Rueybin
Title: The relationship between supervisory board and independent non-executive directors and firm performance in China
Degree: D.B.A.
Year: 2005
Subject: Hong Kong Polytechnic University -- Dissertations.
Corporate governance.
Corporations -- China.
Outside directors of corporations.
Organizational effectiveness.
Department: Graduate School of Business
Pages: x, 138 leaves ; 30 cm.
Language: English
Abstract: This study aims to find out the successful corporate governance systems used in the western countries that can be enforced effectively in China. It provides some practical recommendations after comparing different models of corporate governance around the world. Using a comprehensive data sample of A share listed companies from 1999-2003, regressions are used to study empirically the quality between IND and SB, proxied by age and education. First, the relationship between the quality of supervisors and independent directors and firm performance is examined and results show that a significant positive relationship exists. Second, the relationship between supervisors and independent directors is examined and some amount of overlap in the two roles is found. Evidence shows that there is a tendency for supervisors to be substituted by independent directors. Third, the relationship between CEO/Chair duality and firm performance is analyzed and a weak relationship in all the sample data is found. Finally, whether and how the corporate governance mechanisms were affected by the state ownership is investigated. It can be concluded that the widely used corporate governance mechanisms were ineffective in state-dominated companies. Interviews were also conducted. The responses obtained from the interviewees show that the supervisory board is less effective for listed companies, while independent directors do exert some degree of influence. The interview findings with respect to independent directors concur with those obtained in our empirical results, while those concerning the supervisory board do not. The interview finding suggests that lack of relevant knowledge and experience in corporate operation and management weaken the functions of supervisory board and independent directors .An urgent approach to improving corporate governance is to have qualified supervisors and independent directors on the board. Therefore, I recommend the regulators to provide professional training for directors (especially independent directors) and supervisors and set up a new model for the Supervisory Board by clearly defining the functions and duties of supervisors and independent directors. In the long run, the government should pay more attention to reduce state ownership and promote the market for corporate control.
Rights: All rights reserved
Access: restricted access

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