Empirical Research on the Relevance of Independent Directors and Firm Performance in China Listed Companies

摘要

The paper uses panel data to review the relationship between independent directors and firm performance from the angel of independent directors' proportion, time, occupation, inspiration and so on, and analyze the performance in the influence of the size of independent directors' proportion. After analysis, the following results are provided. First, independent directors have the character of attorneys. Independent directors can't improve the firm's performance in the condition that the competence and realizable force of independent directors is insufficient. When the independent directors become most or even absolute majority in the board of directors, the proportion of independent directors to all directors is negative to the company performance which displays the character of attorneys. The pay of independent directors is positive to firm performance. Independent directors are also economic men and need motivation. Second, independent directors should have the capability of manager. Through reviewing the time, energy and professional occupation of independent directors, we examine that the independent directors who possess enough time and energy and managerial ability can improve the firm's performance. Third, the independent directors take a signal effect. The signal effect of independent directors who hold different ideas damages the firm's performance. The repute of independent directors can improve the firm performance.