Research on the Effectiveness of Board Governance Structure-Evidence from the Tourism Listed Companies in China

Abstract

This paper explored the effectiveness of the boards’ governance from four characteristic aspects, board composition, behavior, incentive and capital, taking the listed companies in China’s tourism industry as sample. The results showed that: there is a significant correlation between the board composition and corporate performance; in contrast, the board behavior characteristics has no significant effect on the corporate performance; however, there is a significant positive correlation between the board compensation incentive and corporate performance, while the board shareholding as the other incentive means has slightly positive correlation with corporate performance. A significant positive relationship is found between corporate performance and the level of the board’s education in board's capital, but the other characteristics, such as the heterogeneity of the board’s professional background, the proportion of the interlocking directors and the political resources owned by the board have no significant correction with the corporate performance. The overall results indicate that board governance effectiveness is relatively low in China’s tourism listed companies.