An evaluation of corporate governance evaluation, governance index (CGINK) and performance: Evidence from Chinese listed companies in 2003

In the present paper, based on samples of 2003, empirical analyses of Corporate Governance Index (CGINK) and its six dimensions of listed companies in China, the index of controlling shareholders' behaviors, board governance index, top management governance index, information disclosure index, stakeholders' governance index, and supervisors committee governance index, are carried out and the results show that CGINK is positively associated with the return on assets (ROA), net assets per share (NAPS), earnings per share (EPS), operating cash flow per share (OCFPS), total assets turnover (TAV), rate of total assets growth (ITA) and Z-score. These indicate that good corporate governance mechanisms improve profitability, stock expansion ability, operating efficiency, growth and development potential, as well as financial flexibility and safety of listed companies. Corporate governance mechanisms of controlling shareholders, board of directors, top management, information disclosure, stakeholders and supervisors committee are largely responsible for decisionmaking and decision-execution mechanisms, and furthermore, they have direct and profound effects on the performance and value of listed companies.