The Influence of Efficiency Monitoring and Interest Assimilation on Taiwanese Corporate Value and Compensation of Top Management－ An Ownership Structure Perspective

• Main Authors: Yao-Hung Yang, 楊燿鴻
• Other Authors: Ghi-Feng, Yen
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/54400427329583435617

博士 === 中原大學 === 企業管理研究所 === 101 === The reasearch investigated efficiency monitoring and interest assimilation in the corporate governance of the electronics industry and the non-electronics industry in Taiwan. Rather than agency theory and stewardship theory, we employed the concept of the family-enterprise dual system as the breakthrough point and developed the research hypotheses from the different degrees of intimacy of the organization member (shareholder) structure to investigate how the outer circle, the inner circle, the core circle, and a shareholding structure influence corporate governance by familization, compensating for the deficiency in central agency problem analyses. We selected listed companies in Taiwan as the research objects, sorted the 2005-2011 data from the archives of the Taiwan Economic Journal (TEJ), and analyzed the data using STATA. The F test result showed that all the models were applicable to the OLS model. The empirical results indicated that the corporate value and compensation of the top management of a company increases when the shareholding of outside institutional shareholders in the outer circle increases. In addition, the corporate value and compensation of the top management of an electronics company increases when the seat-share deviation multiple of the core circle rises. However, the empirical results of non-electronics companies were inconsistent. The corporate value of a non-electronics company decreases, but the compensation of top management increases when the seat-share deviation multiple of the core circle rises. When the core circle of an electronics company merges with the inner circle, a process called familization, the increased familization reduces corporate value, and managers collaborate with each other through compensation and further benefit their own compensation. The differences among ownership structures between electronics and non-electronics companies cause various influences on corporate value and the compensation of directors, supervisors, and high-level managers. The contributions of this study lie in providing an ownership structure perspective that addresses the position of the ownership structure to explore differences in corporate governance, and reflects on the special ownership structure and management types in Taiwan. The perspective enables analyzing the beneficial connection between a company and shareholders, providing enterprises with a more complete investigation, and supplementing insufficiency in previous literature and analyses. We suggest that the shareholding ratio of the outside institutional shareholders of a listed company should increase to facilitate the power of efficiency monitoring. The controlling shareholders in an electronics company should serve concurrently as directors or supervisors to clearly direct the company through the board of directors, tighten the power structure of the core circle, and facilitate the management efficiency. In contrast, the controlling shareholders of non-electronics companies are less professional than those of electronics companies; thus, the controlling shareholders of a non-electronics company should not serve as directors or supervisors and control the board of directors. Professional high-level managers should serve on the board of directors of a non-electronics company to enable the board of directors to adequately control corporate operation information to increase the quality of decision-making.