| dc.description.abstract | In recent years, many companies in Taiwan have suffered from corporate fraud, which has caused a major impact on the financial market. Most of these incidents stem from corporate governance issues such as inadequate supervision by the company’s board of directors, self-interested management, earnings management, auditing, and loss of independence. Business misconduct is pervasive and corporate governance issues are therefore caught highly attention.
This study examines the relationship between corporate governance and the function of the board of directors as well as the role the board plays, based on Tatung, a well-known listed firm in Taiwan which is struggling for survival nowadays. The results show that the diversity, professionalism, and independence of the board of directors determine the way the board operates. Strengthening the function of the board of directors is therefore a key to corporate governance. In other words, firms have to implement monitoring, advisory, and resource acquisition functions. The implications of this study for management practice are that focusing on short-term and self-interested goals, CEO duality, and even busy chair-people, all these would undermine firm value and even lead to financial distress. Conversely, companies with good governance implement the functions of the board of directors, enhance board independence, diversity and professionalism and hire professional management to run the business. They keep firms transparent by the full disclosure of information and shape the integrity of corporate culture as well as commit to corporate social responsibility rather than only maximize shareholder wealth. | en_US |