The impacts of independent director and CEO duality on performance in the Chinese post‐institutional‐transition era
| Author | Jeong‐Yang Park,Jing Yu,Yong Kyu Lew |
| DOI | http://doi.org/10.1002/cjas.1468 |
| Date | 01 December 2018 |
| Published date | 01 December 2018 |
The impacts of independent director and CEO
duality on performance in the Chinese
post-institutional-transition era
Yong Kyu Lew*
College of Business Hankuk University of Foreign Studies
Seoul, Republic of Korea
Jing Yu
China Development Bank
Jinan, Shandong Province People’s Republic of China
Jeong-Yang Park
Nottingham University Business School, University of
Nottingham, Nottingham, United Kingdom
Abstract
This paper investigates the influence of corporate gover-
nance on the performance of modern Chinese firms. Prior
studies were inconclusive about the relationship between
corporate governance and firm performance. Little research
investigates the performance implications of board structure
in the post-institutional-transition era in China. Based on
agency and resource dependence theories, this paper
examines the impacts of board composition and leadership
structure on the performance of Chinese manufacturing
firms that went public on the Shanghai and Shenzhen Stock
Exchanges in 2010. The findings show that separating the
posts of CEO and chair promotes better performance. How-
ever, appointing a larger proportion of outside independent
directors to the board insignificantly affects performance.
This research provides partial support for agency theory
and extended insights into corporate governance in emerg-
ing economy firms. Copyright © 2017 ASAC. Published by
John Wiley & Sons, Ltd.
Keywords: agency theory, board independence, CEO
duality, China, corporate governance, institutional
transition
Résumé
Dans cet article, nous examinons l’influence que la
gouvernance d’entreprise exerce sur la performance des
entreprises chinoises modernes. Les auteurs des travaux
antérieurs n’ont pas pu mettre en évidence la relation entre
la gouvernance d’entreprise et la performance de l’entreprise.
Par ailleurs, à l’ère de la transition post-institutionnelle en
Chine, il y a peu de travaux consacrés aux effets de la structure
du conseil d’administration sur la performance Dans notre
article, nous utilisons la théorie de l’agence et la théorie de
la dépendance des ressources pour examiner les effets de la
composition du conseil d’administration et de la structure du
leadership sur la performance des industries manufacturières
chinoises entrées aux Bourses de Shanghai et de Shenzhen en
2010. Les résultats montrent que la séparation du poste de
PDG de celui du directeur contribue à améliorer la perfor-
mance. Cependant, la nomination au conseil d’administration
d’une plus grande proportion de directeurs externes
indépendants a un impact négligeable sur la performance.
Notre étude corrobore partiellement la théorie de l’agence et
jette une lumière sur la gouvernance d’entreprise au sein des
entreprises des économies émergentes. Copyright © 2017
ASAC. Published by John Wiley & Sons, Ltd.
Mots-clés: théorie de l’agence, indépendance du conseil
d’administration, dualité du PDG, Chine, gouvernance
d’entreprise, transition institutionnelle
Introduction
The recent financial crisis and high-profile corporate
scandals at Enron, Lehman Brothers, WorldCom, and other
companies have led stakeholders to take an interest in the
construction of an effective corporate governance (CG)
This work was supported by Hankuk University of Foreign Studies
Research Fund.
*Please address correspondence to: Yong Kyu Lew, College of Business,
Hankuk University of Foreign Studies, Seoul, Republic of Korea. E-mail:
yklew@hufs.ac.kr
Canadian Journal of Administrative Sciences
Revue canadienne des sciences de l’administration
35: 620–634 (2018)
Published online 6 November 2017 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1468
Can J Adm Sci
35(4), 620–634 (2018)Copyright © 2017 ASAC. Published by John Wiley & Sons, Ltd. 620
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