As the core of corporate governance mechanism design, effective board supervision can curb agency costs. The effectiveness of board supervision largely depends on its independence. The governance participation of external stakeholders also has an important impact. Taking non-financial companies in the Shanghai and Shenzhen stock markets from 2012 to 2020 as a sample, this paper focuses on the relationships between board supervision and two types of agency costs, particularly the impact of government participation, as the most important external stakeholder, on the relationships between board supervision and agency costs. The results show that, with the strengthening of board supervision, the two types of agency costs tend to decrease, and the government's participation as an external stakeholder further strengthens the effectiveness of board supervision and reduces agency costs.