Managerial Ownership,Effectiveness Of Internal Control And Corporate Performance

In recent years,companies such as WorldCom,AIG abroad and Yinguangxia,Zhangzidao at home frequently burst financial scandals.These scandals are considered to be related with companies' internal control.These events have aroused the public increasing awareness of internal control for corporate governance and value creation.And some listed companies such as ShenZhen Worldunion Properties Consultancy Incorporated newly launched management stock ownership plans which set off another wave of equity incentive.In order to increase the value of company,on the one hand equity incentive strategies are commonly adopted,on the other hand companies put more emphasis on their own internal control construction.In practice,the development of internal control and equity incentive is complicated and their development has great influence on national economy.In academia,most scholars believe that managerial ownership is a part of the ownership structure and ownership structure as the basic environment of corporate governance will influence the effectiveness of internal control.They also believe that internal control can reduce companies' transaction costs and make up companies' incomplete contracts.So internal control affects the companies' performance too.However,researches in these areas are focused on the relationship between the ownership structure and the effectiveness of internal control as well as the relationship between the effectiveness of internal control and corporate performance.There are few researches on the relationship between the three factors.Therefore,from the perspective of managerial ownership researches on the relationship and the transmission mechanism between the three factors have important significance.An analysis of the relationship between managerial ownership,internal control and corporate value:corporate value is the ultimate goal of corporate governance.The development of the company is influenced by many factors inside and outside and internal control is an important part of the internal factors affecting the value of the company.Management who accepted the equity incentive will take the initiative to establish and improve the internal control of the corporate and management can not shirk the responsibility for the construction of internal control.The three factors exist three dimensional relations of target,means and actors.In order to achieve the goal,the actors will consider various factors that affect the realization of the target.The actors try to grasp the factors that are not dominant and have a clear responsibility for the factors that are dominant.This paper collects the data of 2012-2014 Chinese A-share listed companies samples.After examining the relationships between managerial ownership,effectiveness of internal control and corporate performance,this paper concludes that:(1)Managerial ownership can improve internal control.(2)Managerial ownership can increase the value of company.(3)Internal control plays a role of mediating effect in managerial ownership's affecting on corporate performance.Then based on that,this paper suggests that companies should improve the ownership structure and try to build the mechanisms of ownership structure and internal control.