The Impact of Board Characteristics on Firm Performance of the Information Technology Sector: Evidence from China

Board of directors of the Chinese companies differs from the others, playing an essential role in firm management. However, literature on the effect of the particular board structure of listed Chinese companies on firm results following the reform of corporate governance regulations is relatively limited. It is still uncertain to verify whether certain board characteristics affect business performance and to what extent to influence it after reforming corporate governance regulations. So this study has the goal of determining any relation between board attributes and overall results. This study chooses Chinese quoted firms of the information technology industry as the sample to examine how the gender diversity of board, board independence, CEO duality, and board meetings frequency influence firm performance. The final panel data sample comprises of 792 company-year observations from 132 public firms of the information technology sector from 2012 to 2017. Besides, this study has come up with four hypotheses related to the above board variables in the light of three theories: agency theory, resource dependence theory, and stewardship theory. ROA is used for measuring financial performance and robustness test is carried out by using alternative measurement ROE. By performing regression of fixed effect models, this study concluded that board gender diversity and CEO duality have a considerably positive connection with firm performance, whereas board independence, contrary to the prediction, negatively affects company performance. Also, the number of annual board meetings is not linked with organization performance. Finally, these results are generally robust although CEO duality is no longer remarkable for the relation to ROE