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The Research of Board Monitoring Behavior under Uncertainty |
DING Zhongming,TAN Xiaowei |
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Abstract Board of director is the major mechanism for monitoring managers and working our decisions based on the managerial capability, effort, and the performance of the firms. But the monitoring behavior will be limited by information asymmetry and uncertain factors, and then affect the firm performance. Based on the uncertainty theory, this paper investigates the board monitoring behavior in two aspects: internal uncertainty and external uncertainty. In empirical analysis, the dependent variable is the direct monitoring behavior (times of board meeting) and monitoring result (high-level personnel payment and surplus management).The empirical result illustrates that: the team heterogeneity is negative with managers payment and firm performance. The complexity of business is negative with managers payment and firm performance, the composition of board of director is not related with the payment and performance. Times of board meeting and surplus management are not related with team heterogeneity, the complexity of business and firm scale. Furthermore, financial crisis is negative with monitoring and performance. Overall, uncertainty weakens the board monitoring strength and affects the firm performance.
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Received: 14 January 2014
Published: 15 April 2014
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Corresponding Authors:
TAN Xiaowei
E-mail: tanxiaowei918@163.com
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