The effects of Relationship between Independent Director System and State Owned Minor Ownership on the Corporate Performance in Taiwan
Date Issued
2008
Date
2008
Author(s)
Sun, Yu-Hsuan
Abstract
In recent years, the reform of the Taiwanese corporate governance is heading toward the direction of setting the independent director system and audit committee, in the view of making the system more eligible to take its real effect of supervision so that the level of the corporate governance in Taiwan will be aligned with that of the world. This research is mainly exploring the relationship between those companies with independent director systems and their corporate operating performances. The research further encompasses the relations between Family directors and their corporate operating performances. Besides, the variable of State Owned Minor Ownership is further added to test its effect on the corporate operating performances.he research is sampled from 254 companies listed in Taiwan, which are built with one or more than one Independent Director, with a research period of 1998 through 2007. The research has reached the conclusion as following based on the empirical results:1)The corporations with the mandatory setting of independent director system after 2002 show worse corporate performance than those without the setting of independent directors before 2002.2)After 2002, the corporations with the mandatory setting of independent director system show better corporate performance than those corporations who voluntarily set the independent director system.3)The higher percentage of independent directors is positively correlated with the corporate operating performances. 4)The percentage of busy independent directors is positively correlated with corporate operating performances.5)The higher percentage of family directors is negatively correlated with the corporate operating performances.6)The corporations which were once Public Corporations have shown positive correlation with the corporate operating performances.7)The ratio of the public shareholders has shown positively correlation with corporate operating performances. According to the empirical results, the research can infer that the independent director system actually takes its real effect of supervision and offer the professional consultation to improve corporate operating performances. Furthermore, the privatization of public share and public directors contribute positively to the corporate operations. Hope that the result of this research can be a useful reference for those Taiwanese listed companies and government who wish to set an independent director system.
Subjects
corporate governance
independent director
public directors
family directors
corporate operating performance
Type
thesis
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