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Busy boards and corporate performance

Busy boards and corporate performance Purpose – The purpose of this paper is to analyze and examine the relationship between busy boards and corporate performance in China. Design/methodology/approach – Based on a sample of non‐financial listed companies in the Chinese stock market from 2007 to 2010, by defining several measures of busy board, the paper investigates the relationship between busy boards and corporate performance in China. Findings – The paper finds many busy boards in Chinese listed companies; compared to companies without multiple directorships, the companies with multiple directorships have better corporate performance; the number of multiple directorships in boards should maintain a certain ratio, or the busy boards will be harmful to the corporate performance. Originality/value – This is the first paper to analyze and examine the impacts of busy boards on firm performance in China directly. The findings are also useful to regulation of limiting the numbers of independent directors seated on other boards. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Finance Review International Emerald Publishing

Busy boards and corporate performance

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Publisher
Emerald Publishing
Copyright
Copyright © 2013 Emerald Group Publishing Limited. All rights reserved.
ISSN
2044-1398
DOI
10.1108/20441391311330618
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to analyze and examine the relationship between busy boards and corporate performance in China. Design/methodology/approach – Based on a sample of non‐financial listed companies in the Chinese stock market from 2007 to 2010, by defining several measures of busy board, the paper investigates the relationship between busy boards and corporate performance in China. Findings – The paper finds many busy boards in Chinese listed companies; compared to companies without multiple directorships, the companies with multiple directorships have better corporate performance; the number of multiple directorships in boards should maintain a certain ratio, or the busy boards will be harmful to the corporate performance. Originality/value – This is the first paper to analyze and examine the impacts of busy boards on firm performance in China directly. The findings are also useful to regulation of limiting the numbers of independent directors seated on other boards.

Journal

China Finance Review InternationalEmerald Publishing

Published: May 10, 2013

Keywords: Boards of directors; China; Business performance; Busy boards; Corporate performance; Reputation hypothesis

References