The Empirical Research On The Relationship Between Board Internal Governance And Financial Risk

The financial risk is an important research course in the area of finance. The objectivity of the financial risk makes it can’t be avoided, every enterprise must face the problem, which is not only a serious threat to the sustainable development of enterprises,but also cause a bad influence on the prosperity of the market economy. Do not repeat for financial risk disposal inappropriate business faces serious crisis. So enterprises have to make in-depth researches about the financial risk they have, and find out deep influence factors, combining with the actual situation of our country, try to minimize losses through corresponding measures.The factors that influence the financial risk are complex, there are the problems of internal governance, and are also associated with the change of external environment. But the most fundamental factor is internal governance. The board internal governance mechanisms is a key part of internal governance. Each country issues Legislation, rules and guidelines to build an efficient board internal governance mechanisms aiming at reducing financial risk and treat this as the ultimate goal. The board internal governance mechanisms of listed companies in our country have been improved significantly in legality and regulatory, but the effectiveness of internal governance is not significant.Therefore, it is urgent to treat the internal governance mechanisms as the starting point of the board of directors system reform. So this article will excavates the internal governance mechanism in the research of the financial risk factors and research the inner relation between the characteristics of the board internal governance and the financial risk.According to the results of the research, to adjust the board internal governance structure and ensure the enterprise financial risk to the minimum level.This article is based on the related researches at home and abroad, using empirical research methods, treating all non-financial and the non-ST listed companies from 2012 to2014 in our country as the research samples, to analyze the factors that influence the financial risk according to a series of related characteristics of the board internal incentive mechanism, and combining with literature review, the research assumptions are put forward to analyze the effects of the board internal governance mechanism to the financial risk.In the process of empirical research, I will build a regression model according to the above assumptions and choose some variables that can effectively describe the characteristics of internal governance, and to make the study stay logical, I divide these variables into three parts, the internal governance structure, the characteristics of the members of the board and the internal incentive mechanism, in order to test the effects of board characteristics of internal governance of enterprise to the financial risk. Finally,based on the above empirical research, the article will make an evaluation of the results,analyze the shortage of the research, and put forward the relevant measures to strengthen board internal governance in order to realize the perfect management and reduce the financial risk.