Board independence and fluctuations of corporate performance--A research from the angle of social relations of independent directors

Based on whether there is social relation between independent directors and CEOs,there are two types of independence in the board of directors:nominal independence and real independence.Their influences on the fluctuations of corporate performance are varied.First,the board independence will strengthen supervision and reduce the fluctuations in corporate performance.Second,the nominal board independence will reduce performance fluctuations but with inadequate significance;however,the real independence significantly reduces fluctuations of corporate performance;social relations between CEO and independent directors will encourage fluctuations of corporate performance.This also confirms that the independent directors can reduce the corporate performance instead of just holding the post and doing nothing.At the same time,in order to improve the real board independence,when recruiting independent directors,those gray directors who have social relations with CEO must be identified and excluded.