Abstract: The growth of the ability of overseas subsidiary is the internal factor driving the changing of its strategic roles. From the point of the agency relationship between the parent and subsidiary companies and the ability of the enterprise, there exists an internal and inevitable connection between the strategic roles of the subsidiary and the arrangement of its board of directors. The overseas subsidiary with different strategic roles and the arrangement of the board of directors should consider both minimizing the agency cost and increasing the abilities of the subsidiary, namely, when making arrangement of the board of directors according to the agency arrangement between the parent and subsidiary companies, it should also been considered, from the perspective of ability, how to improve the strategic performance of the subsidiary through the arrangement of the board of directors.

Key words: overseas subsidiary; strategy; board of directors; ability; agency