31 A Study on Influence of Bureaucrat Directors of Listed Companies

Almost 25% of the directors in a sample of 118 A-share companies in the Shanghai Stock Exchange IPO from 2003 to 2008 have government background. These bureaucrat directors have great influence in the state-owned listed companies. They usually play the role of government, reducing the board's professionality. Besides, they often put the political and social objectives upon the companies' profit target, making companies bear more social responsibility, such as increasing employment, etc. Although the bureaucrat directors also bring in government subsidies and protection for the listed companies, they still lead to lower accounting earnings in these listed companies.