The study aims to investigate the relationship between shares collateralized by board of directors and related party transactions. Related party transaction is one of the common transaction types for public listed companies at stock exchange market and at over-the-counter market in Taiwan. Many fraud cases are caused from related party transaction which tends to give us a negative impression. Thus related party transaction is considered as a warning of a company fraudulent bankrupt. Generally speaking, the personal behavior of the board directors collateralize their shares doesn’t matter with the company’s operations. However, there is a significant correlation between fraud case and the shares collateralized by board of directors. The sample of the study includes the public listed companies at stock exchange market and at over-the-counter market in Taiwan during 2012-2015. The result reveals a positive correlation between the shares collateralized by board of directors and related party transactions, i.e., when the board directors collateralize their shares, they usually adopt different types of related party transactions to manage or manipulate the performance and profit of the company in order to keep stock price high.