A Study on the Relationship between Board Characteristics and Corporate Performance of Listed Companies in China

In modern corporate governance, the separation of ownership and management right results in the increasing rise of contradictions between company management level and shareholders. Internal governance problem receives much attention. Board characteristic is one of the cores of corporate governance, so the board has been an important research topic of domestic and overseas scholars. The influence of board characteristics of listed companies in China on corporate performance is mainly discussed in this paper. Studying the influence of board characteristics on corporate performance contributes to improving corporate governance level. Relevant data of Chinese listed A-share companies in 2015 were used as the object of study. Corporate performance was measured with the return on assets by applying regression analysis method. The relationship between board characteristics and corporate performance was investigated from two aspects including the board size and the proportion of board independence. The results show that firstly, proper expansion of board scale is beneficial to improve corporate performance. In other words, significant positive correlation exists between the board size and corporate performance; secondly, the increase in the proportion of independent directors contributes to improving corporate governance level, that is, board independence is positively related to corporate performance.