TITLE:
An Empirical Analysis of Directors’ Performance, Remuneration and Corporate Performance of Chinese Listed Companies
AUTHORS:
Jun Zhou, Ruoxue Bu
KEYWORDS:
Directors’ Performance, Directors’ Responsibility, Directors’ Remuneration, Corporate Performance
JOURNAL NAME:
iBusiness,
Vol.12 No.4,
December
7,
2020
ABSTRACT: In listed companies, directors (including
independent directors and non-independent directors, etc.) are responsible for
grasping the company’s development direction, deciding on major company
matters, and supervising the management, so
as to obtain certain remuneration from the company. Therefore, directors’
performance and remuneration in return for their performance will inevitably
affect the corporate governance level of listed companies and thus affect
performance of listed companies. This article takes the performance of
directors of listed companies and the remuneration of directors as the entry
point. From the perspectives of rights and obligations, this paper studies the
relationship between the performance of directors, remuneration and company
performance, in order to improve the governance level of directors of listed
companies. Based
on the data of Shenzhen and Shanghai A-share listed companies from 2005 to
2019, this paper analyzes the relationship between directors’ performance,
remuneration and company performance of Chinese listed companies. The results
show that directors’ meeting attendance is positively correlated with company
performance; and there is no obvious correlation between directors’ negative
opinions and company performance; directors’ remuneration is significantly
positively correlated with company performance. The research in this article
has positive enlightenment and reference for improving the directors’
governance of listed companies. Finally,
based on the conclusions, several countermeasures and suggestions are proposed
to improve the governance of directors: further clarify the responsibilities of
directors to avoid confusion and overlap with management responsibilities; give
full play to the supervisory function of directors to management, especially
pay attention to the supervisory duties of non-independent directors or
internal directors; the remuneration of directors should be more reasonable,
and the remuneration should be determined according to the requirements and
performance of directors’ duties; improve the evaluation and assessment
mechanism of directors, pay more attention to the qualifications and ability of
directors.