A Study of the Optimum Size of Board of Directors and Business Performance from Taiwan Listed Companies

• Main Authors: Ning, Yu-Chin, 甯玉琴
• Other Authors: Wang, Sue-Fung
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/82790530428555860895

碩士 === 國立交通大學 === 管理學院碩士在職專班財務金融組 === 98 === This study is mainly to explore that after Taiwan Stock Exchange and OTC promulgated and implemented “Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies” on October 2002, along with the sound capital market, if the separation between the company ownership and the operating right is more clearly, and then it will be more obviously to show a conflict of interest between that the company's owners and managers. The main purpose of this study is to understand that under the integral economic environment condition and the governance by relevant laws and regulations the operation of board of directors associated with business performance, and then obtain the optimum size of board size from empirical evidence. This study is adopted these listed companies in Taiwan from 1995 to 2008 as the research object, and applied ROA, TOBIN’SQ and SHARE RETURN, to be the indicators of measuring companies’ business performance, with focusing companies’ fundamentals, such as the board size, company scale, enterprise age, debt ratio, R&D expense ratio, standard deviation of stock returns, independent director’s seat ratio, director’s shareholding ratio and industrial attributes, etc., to conduct the empirical research, and then the empirical result showed that the optimal size of companies’ board of directors will be less than 11 (included) seats since 3 measures of the business performance have showed an insignificant correlation for the board size that more than 11 seats. The board size shall be optimal, if it is too small which may possibly be caused insufficient professionalism; however, if the size is too big which the operation of the board of directors may possibly be lacked of efficiency then. Therefore, it is a really important operating subject to make use of adding and reducing the board size to form a professional board of directors with high operating efficiency then.