Corporate governance in Chinese listed companies: how managerial characteristics matter?
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Date
26/11/2016Embargo end date
26/11/2019Author
Xing, Lu
Metadata
Abstract
This thesis consists of three studies on corporate governance issues of
Chinese listed companies. In the first study, I investigate the role of board
secretaries in management earnings forecasts. Individuals in this senior
executive position are responsible for coordinating information disclosure. I
find that their legal and accounting expertise and foreign experience help
improve management earnings forecast quality. The quality of forecasts, as
indicated by forecast occurrence, frequency, precision and accuracy, is
positively associated with board secretaries’ duality role and equity holdings,
whereas it is negatively associated with their political connections. The quality
of forecasts is found to increase the compensation of board secretaries. Finally,
I show that the equity holdings of board secretaries reduce litigation risks and
increase corporate philanthropic giving.
Based on the notion that women cooperate more with women than with
men, my second study examines the gender interaction effect between female
top managers and female board directors in Chinese firms. I show that this
gender interaction is positively associated with the firm’s accounting return but
negatively associated with its stock price return. Earnings management, which
can lead to overstated accounting numbers but unfavourable stock market
reactions, partly explains the opposite results. Furthermore, I find that only the
newly appointed female top managers engage in this earnings management.
Overall, the findings suggest that the pressure on women to perform leads to
‘women helping women’, which is detrimental to shareholders’ value.
Women are underrepresented on corporate boards. By employing the
large variation in socioeconomic development across provinces of China, the
third study shows that the barriers to board gender diversity are deeply rooted
in societal gender role attitudes. I find that corporate boards tend to be more
gender diverse in a province where there is a smaller gender difference in
educational achievement in STEM disciplines, where there is a stronger belief
that women and men possess equal intrinsic abilities, or where female political
leaders are present in the provincial government or communist party. However,
I find little evidence that female labour force participation or childcare provision
would affect board gender diversity. Collectively, the findings suggest that it is
the gender equality attitudes rather than the supply of average female labour
that contribute to gender-diverse corporate boards.