THE RELATIONSHIP BETWEEN BOARD CHARACTERISTICS AND FINANCIAL PERFORMANCE IN CHINA: A RESEARCH ON FOOD PROCESSING COMPANIES

Abstract

The board of directors, as the core organization of corporate governance, plays an important role in the profitability, asset utilization efficiency, resource utilization and other aspects of the company. Its decision-making ability can often determine the operation effect of a company. A good structure of it can give full play to the enthusiasm of its members to make better decisions for the company and improve the financial performance of the company by making use of their professional knowledge and professional judgment ability.

Food processing industry undertakes the important task of Chinese economic development and food supply. Forty Chinese Food Processing Companies in all were selected and the relevant data of their annual reports from the Year 2014 to 2018 were collected. The current situation of the board characteristics and financial performance of Chinese food processing companies was described. Based on theoretical analysis, research hypothesis was put forward, and the correlation and internal relationship between board characteristics and financial performance were empirically analyzed by SPSS 22.0. The results show that the board size and board meeting are non-significance correlated with financial performance. Board independence and CEO-duality are positively correlated with financial performance. According to the analysis results, the study puts forward some suggestions to improve the board system, and then improves the financial performance of enterprises.