The Influence Of Family Governance On The Internal Control Effectiveness

Since the 21st century,the internal control has been in the spotlight of academic researches.Between 2006 and 2010,our country has continuously introduced a number of internal control regulations,guide and regulate the public companies to build the internal control system.Under the direction of relevant regulations,many private enterprises gradually establish their own internal control system,but its actual performance is influenced by many factors.In our country,more than 60%of the private enterprises are the family business,the important executive positions in enterprise are taken office by the family members,the leader of the company is at the center of the family members,different member has different position around him,the distribution of this kind of governance structure is characteristic in a way.The purpose of this paper is to research the characteristic of family management on internal control effectiveness in the family enterprises.This paper was based on the theory of principal-agent and the difference sequence pattern,select listed companies on Shanghai and Shenzhen Stock Exchange,choose the data of private family enterprise of Zhejiang province from 2014 to 2016 as the research sample,using the empirical analysis method,from the perspective of specific family management characteristic,study the affection of genetic relationship and management concentration on the internal control effectiveness.The results shows that:(1)There is an inverse association between the genetic relationship of family members and the internal control effectiveness;(2)The management concentration of family members and the internal control effectiveness is also significant negative correlation;(3)The higher concentration of the actual controller's control would make the impact of genetic relationship and management concentration on internal control effectiveness more obvious;(4)In large enterprise,the genetic relationship and management concentration would observably reduce the effectiveness of internal control,but in medium-sized enterprises,only genetic relationship has weak influence;(5)Only in low solvency enterprise,the genetic relationship and management concentration would reduce the effectiveness of internal control,but in high solvency enterprise there is no significant effect;Finally,after summarize the research conclusion,I put forward some suggestions about how to improving the adverse effect of family governance on internal control effectiveness.The research results are of great importance to the survival and development of family business,have important theoretical and practical significance,these will help family enterprise strengthen internal control and improve management efficiency,accelerate the development of private economy.