A Study on Efficiency Monitoring and Interest Assimilation in Corporate Governance: Listed Companies in Taiwan

This paper examines whether efficiency monitoring has a positive influence on corporate performance by using the fixed effect model with panel data of listed firms in Taiwan from 2005 to 2010. The results show that having a shared interest group, formed by the controlling shareholders of a company and its board directors, leads to a failing monitoring function of the board of directors. Moreover, greater divergence between the number of board seats controlled and voting rights leads to a higher likelihood of corporate performance appearing to be an inverted curve. If this divergence exceeds a certain threshold, the interests of external shareholders may be harmed by large shareholders.