| Summary: | 碩士 === 國立臺北大學 === 企業管理學系碩士在職專班 === 89 === A STUDY ON CORPORATE FINANCIAL FAILURES
AND THE CHARACTERISTIC OF SUPERVISORY STRUCTURE
ABSTRACT
One of the major causes of the significant increase in the number of cases of corporate financial failure in Taiwan during the years of 1998-2000 could be attributable to corporate’s inadequate supervisory functions. Responsible persons and major shareholders of company appropriated undue benefits by irregular transactions with related parties；obtained control of a company by means of a listed shell company；and occupied seats of directors by cross-holding of shares to manipulate stock price. Those particular people falsely inflated their credit and misappropriated the assets of the company when they came across financial crisis. Therefore, the issue of effective supervision has presently become a hot topic.
A listed company in Taiwan is designed to have three mechanisms：The board of directors；supervisors；and shareholders meeting. Business is operated by the board of directors under the supervision of supervisors. When the supervisors fail to exercise their duties or fail to stop any illegitimate activities of the board of directors in time, the company may end up with financial failure. This study is an attempt to analyze the relation between the characteristic of company’s supervisory structure and the occasion of financial failure, and hopefully, the result thereof will draw the attention of the competent agencies and learned persons to contemplate providing in the Company Law the supervisors with independent governance in executing their duties.
This study utilizes step-by-step classification mode to show the significant factors that may influence the occasion of financial failure, namely, supervisors who are not relatives of chairman or general manager；co-management supervisors；not members of director’s family as against the ratio of cash flow and the turnover of fixed assets. The conclusion shows that the percentage of accuracy of the predicted classification result is 75% and it raises to 86% when the factor of change in the supervisory functions is added thereto. Therefore, it is obviously notable that corporate supervisory functions play a contributory role to the prediction and prevention of financial failure and close-down.
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