An Empirical Study on the Relationship between Corporate Performance and Board and Supervisors’ Mechanism and Independence

• Main Authors: Chung-Chia Liu, 劉仲嘉
• Other Authors: 柯承恩
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/16017962087987299583

碩士 === 國立臺灣大學 === 會計學研究所 === 94 === After the scandals such as Enron in the U.S, and InfoDisc, ProComp in Taiwan, the board of directors and supervisors have become the main issue when talking about corporate governance. It is urgent to strengthen the board of directors and supervisors mechanism in Taiwan. On February 22 and 25, 2002, Taiwan Stock Exchange Corporation (TSEC) and Over-the-Counter (OTC) amended “Criteria for Review of Securities Listings” and ”Criteria Governing Review of Securities Traded on OTC Markets”, forcing that the corporations before IPO should have at least two independent directors and one independent supervisor in order to become public hold companies or be traded on OTC market. In this research, the samples are all the companies in the Taiwan Stock Exchange Corporate (TSEC) and Over-the-Counter market (OTC) from 2002 to 2004, and financial industry is excluded. We would like to discuss the relationship between the corporate performance (ROA, ROE, EPS and Tobin’s Q) and characteristics of the board of directors and supervisors through descriptive statistics and OLS regression analysis. The independent variables including the size of the board, the shareholding structure, the percentage of shares pledged, the percentage of independent directors and supervisors and whether they are voluntary or compulsory, the existence of other jobs held by independent directors and supervisors, and their occupational background. Our empirical results show that 1. The size of the board of directors and supervisors is significantly negatively associated with corporate performance. 2. The shareholding structure of the board members and supervisors is significantly positively associated with corporate performance. 3. The percentage of shareholding pledged by board members and supervisors is significantly positively associated with corporate performance. 4. The percentage of independent directors and supervisors is significantly positively associated with corporate performance. 5. The corporate performance of the companies with voluntary independent directors and supervisors is significantly better than those without independent directors and supervisors. 6. The corporate performance of the companies with compulsory independent directors and supervisors is significantly better than those without independent directors and supervisors. 7. The corporate performance of the companies with compulsory independent directors and supervisors is significantly better than those with voluntary independent directors and supervisors. 8. Independent directors who are scholars, experts or top managers in other companies are significantly positively associated with corporate performance. 9. The existence of other jobs held by independent directors and supervisors is significantly negatively associated with corporate performance.