Board size affects firm performance.docx

Board size affects firm performance.docx

《Board size affects firm performance.docx》由会员分享，可在线阅读，更多相关《Board size affects firm performance.docx（29页珍藏版）》请在冰豆网上搜索。

Boardsizeaffectsfirmperformance

Boardsizeaffectsfirmperformance

Content

1.0Abstract1

2.0Introduction1

3.0Literaturereview3

4.0DataandMethodology6

5.0ResultsandAnalysis9

5.1Descriptivestatisticalanalysisofboardsize9

5.1.1Descriptivestatisticalanalysisofboardsize9

5.1.2Descriptivestatisticalanalysisofindependentdirectors11

5.2Descriptivestatisticalanalysisoffirmperformance14

5.2.1DescriptivestatisticalanalysisofYrEndMarketCap14

5.2.2DescriptivestatisticalanalysisofTobin'sQ14

5.3Thecorrelationanalysis15

5.3.1Thecorrelationanalysisoftherelationbetweenthenumberofboardmembersandfirmperformance15

5.3.2Thecorrelationanalysisoftherelationbetweenthenumberofindependentdirectorsandfirmperformance17

5.4Regressionanalysis20

5.4.1Regressionanalysisofthenumberofboardremembersandfirmperformance20

5.4.2Regressionanalysisofthenumberofindependentdirectorsandfirmperformance28

6.0conclusionandthefuturework32

6.1Conclusion32

6.2Thefutureresearch33

Reference34

Boardsizeaffectsfirmperformance

1.0Abstract

OneoftheprimaryresponsibilitiesofaboardofdirectorsistoassessmanagementpracticesandtomakesurethattheCEOisconsistentwiththeinterestsofshareholders.Boardisthecoreofcorporategovernancestructure，andtheefficiencyofboardgovernancewillbereflectedthroughcompanyperformanceThispapertakesthetop100AmericacompaniesasresearchsamplestoinvestigatetherelationshipbetweenboardcharacteristicsandenterpriseperformancebasedonSPSSstatisticalsoftwareandrelatedtheoriestools．Theresultsfromourstudyshowthat:

First，asthesizeofboardandenterpriseperformanceisnotpositiverelated，expandingthesizeofboardappropriatelywillreduceenterpriseperformanceSecond，theproportionsofindependentdirectorsandtheproportionofdirectorsamongshareholdersarebothpositivelycorrelatedwithcorporateperformance.

2.0Introduction

Thispaperpaysattentionstotheanalysisoftherelationshipbetweenboardsizeandthefirmperformance.BoardofdirectoristhecorecomponentoftheinternalCorporateGovernance,anditisanimportantdecision-makingandsupervisionorganization.Thefunctionofboardofdirectorisveryimportantincorporategovernance,andestablishingareasonableandeffectiveboardisthekeytobuildingamodernCorporateGovernance.Itistheconcernofdomesticandabroadscholarsandcorporategovernanceorganizationthatifboardstructureinfluencescorporateperformance,andthereisnotaunifiedconclusiononthissubjectyet.Thispaperfirstlycarriesonthesurveytothedomesticandinternationalresearchdocumentoftherelationshipbetweenboardstructureandcorporateperformance,andthencarriesontheoreticalresearchandempiricalanalysistotherelationshipbetweenboardstructureandcorporateperformanceonthebasisoftheresearchinexistence.

Basedontherelatedtheoriesthispaperdefinesthevariablesofboardsizeandstructureandthefirmperformance,whicharebasicelementsofthedeepanalysisprocessintheafterpartofthispaper.AndtheempiricalresearchisfinishedbytheSPSSstatisticalsoftware,inwhichtherelationshipisanalyzedand100Americacompaniesareregardedasresearchsamples.Thispaperexaminestherelationshipbetweenboardcharacterandcorporateperformanceincludingboardsize,proportionofindependentdirector,boardleadershipandboardshareholdings.Throughthedescriptiveanalysistotheboardcharacterize,boardsizeofsamplescompaniesinAmericahasthedownwardtrend;theproportionofindependentdirectorshasbeenincreasingyearbyyear;mostcompanieschoosetheleadershipstructureofgeneralmanagerservedasdirectororassistantchairmanofboardofdirector;theaverageamountofdirectorshareholdinghastheincreasingtrend,buttheaverageratioofboardshareholdingisstilllow.Throughtheregressionanalysis,wefindthatboardsizehastheinvertedU-curverelationshipwithcorporate,theproportionofindependentdirectorhavenosignificantcorrelationwithcorporateperformance,dualityofgeneralmanagerandchairmanofboardispositivelycorrelatedwithcorporateperformance,andtheratioofdirectorshareholdingispositivelycorrelatedwithcorporateperformance,butthecorrelationdidn’tpassthestatisticalinspection.

Andtheliteraturereviewinthefirstpartofthispaperisfinished,whichmainlyanalyzetherelationshipbetweenboardsizeandsstructureandfirmperformancethatisresearchedindifferentliteratures.Thesecondsectionissamplesdatacollectionandmethodology,whichwilldoanespecialanddetailedexplanationonresearchhypotheses,datasource,andthechoiceofvariablesaboutboardsizeandfirmperformanceetc.thethirdsectionistheresultsandempiricalanalysisofsamplesdatathroughtheSPSSstatisticalsoftwarethatmainincludingDescriptivestatisticalanalysisandregressionanalysisandcorrelationanalysis.Andthefinalpartofthemainresearchbodyisconclusionsection,whichmainincludessummaryoffindings,weaknessesofthispaper,andpossiblefutureresearch.

3.0Literaturereview

MohamedBelkhir（2009）considersthatContrarytotheoriespredictingthatsmallerboardsofdirectorsaremoreeffective,increasingthenumberofdirectorsinbankingfirmsdoesnotundermineperformance.Incontrast,theevidenceisinfavorofapositiverelationshipbetweenboardsizeandperformance,asmeasuredbyTobin’sQandthereturnonassets.Thepaperinvestigateswhetherthispositiveassociationisduetothefactthatbanksreducethenumberoftheirdirectorsintheaftermathofpoorperformancebytestingfortherelationshipbetweenboardsizeandperformance.Thefindingsshowthatthenumberofdirectorsleavingtheboardandthenumberofthosejoiningtheboardforthefirsttimeincreasefollowingapoorperformance,butthenetchangeinboardsizeisnotaffectedbypastperformance.

IndraAbeysekera（2010）inhispaperexplorestheeffectsofthesizeoftheboardofdirectorsandboardinvolvementinstrategyonfinancialperformanceintheprivateclubindustry.Andhispaper’sresultsshowedthatboardmembers’involvementinstrategyandthesizeoftheboardofdirectorshaveapositiveinfluenceonaprivateclub’sfinancialperformance.

SandraMariaGeraldesAlves（2011）extendspreviousresearchbyexaminingempiricallyhowboardstructureaffectsthemagnitudeofearningsmanagementforcompanieslistedinPortugal.Inparticular,thepaperfocusesonthemaincharacteristicsoftheboardstructurethatarehighlightedbythePortugueseSecuritiesMarketSupervisoryAuthorityrecommendations,i.e.boardsize,boardcompositionandboard'smonitoringcommittees.Hisresearchresultssupportthepredictednon-linearrelationshipbetweenboardsizeandearningsmanagement.Itisalsofoundthatdiscretionaryaccrualsarenegativelyrelatedtoboardcomposition.However,noevidenceisfoundthattheexistenceofanauditcommitteeaffectsthelevelsofearningsmanagement.

PriorresearchhasinvestigateddeterminantsofCEOcompensation.However,thatresearchhasbeenprimarilylimitedtolargefirms.C.JoeUeng,DonaldW.Wells,JulianaD.Lilly（2000）intheirstudyinvestigatestheimpactofCEOinfluenceovertheboardofdirectorsonCEOpayforbothlargeandsmallfirms.Additionally,otherdeterminantsofCEOpayforbothlargeandsmallfirmsareexamined.ResultssuggestthatCEOinfluenceovertheboardsignificantlyaffectsCEOpayforlargefirms.However,wedonotfindthesameevidenceforsmallfirms.FirmsizeistheprimaryfactorofCEOpayforsmallfirms.EvidenceinthisstudysuggeststhatCEOpayoflargefirmsismostlyafunctionofCEOinfluenceovertheboard,firmsize,andfirmperformance.

MichaelBradbury,YTMak,SMTan（2006）examinestherelationbetweengovernance（asmeasuredbyboardandauditcommitteecharacteristics）andaccountingquality（asmeasuredbyabnormalaccruals）inasettingwherethereisnoapriorireasontosuspectsystematicmanagementofearnings.UsingdatafromSingaporeandMalaysia,wefindbothboardsizeandauditcommitteeindependenceisrelatedtolowerabnormalworkingcapitalaccruals.Furthermore,therelationbetweenauditcommitteeindependenceandhigherqualityaccountingexistsonlywhentheabnormalaccrualsareincomeincreasing.Thissuggeststhatauditcommitteesareeffectiveinthefinancialreportingprocessbyreducingthelevelofincomeincreasingabnormalaccruals.Theresultsalsoindicatethatauditcommitteesareeffectiveonlywhenallmembersareindependentdirectors.

ParichartRachpradit,JohnC.S.Tang,DoBaKhang（2012）intheirpaperfindsthatbothownershipandboardstructurehaveeffectsontherelationshipbetweenCEOturnoverandfirmperformance.TheprobabilityofCEOturnoverislowerwhenthefirmiscontrolledbyfamily,theCEOispartofthecontrollingfamily,andboardsizeislarger.Contrarytopreviousstudies,sensitivityofCEOturnovertofirmperformanceishigherwiththepresenceofCEOdualityandlowerdegreeofboardindependence.WhenaCEOcontinuestoworkbeyondretirementage,theprobabilityofturnoverisnotassociatedwithfrimsperformance.

SeokiLee,QuXiao（2011）intheirpapertoperformsapooledregressionanalysistoexaminetheproposedrelationship.Thesampledcompaniesarefromtheperiod1990-2008,consistingof281and1,406observationsforthehotelandrestaurantindustries,respectively.Thestudyadditionallyperformstheanalysisforthe1990sandthe2000sseparatelyforacomparisonpurpose.AndtheirfindingssupporttheU-shapedrelationshipbetweenca