EXAMINING BOARD COMPOSITION AND FIRM PERFORMANCE

This paper investigates the relationship between key factors of board composition and firm performance. We find that listed companies in Taiwan are suffered from the divergence between stock-control rights and earnings distribution rights, and the divergence of rights is negatively associated with firm performance, as predicted. Besides, consistent with the viewpoint of Agency Theory that the controlling interests of CEO may induce them to enhance company performance, we find that, CEO internalization is significantly positively associated with firm performance. In addition, the results of the influence of board structure document that, the more outside independent directors of a company, the better performance the company has. Our findings provide strong support for the notion that corporate ownership structure and board compositions are key factors in determining the corporate governance efficiency and play important roles in enhancing firm performance.