Board Meeting Frequencies on Various Topics and Corporate Governance: Evidence from China

Abstract

The paper examines the relationship between numbers of topic-specific board meetings and quality of corporate governance. The quality of corporate governance is estimated by CEO turnover-performance and compensation-performance sensitivities. Information about topic-specific meetings is collected from the reports of independent directors in Chinese listed firms over the period of 2005 to 2015. We document that more frequent discussions of growth strategies for the use of IPO proceeds, investment and acquisitions increase the CEO compensation-performance sensitivity. However, more discussions about the nomination of directors and top management are likely to reduce the sensitivities of CEO turnover and compensation to performance. Our findings shed light on what makes boards more efficient, and how board monitoring on assorted decisions modifies the relationship between CEO interests and firm performance.