The Impact Of Executive Compensation Incentive On The Social Responsibility Fulfillment From The Perspective Of Internal Control Quality Mediating Effect

Nowadays,social problems represented by ecological problems are constantly emerging.Some enterprises have been willfully producing,operating and discharging pollutants,which has become one of the main culprits of environmental pollution and ecological destruction.As an economic organization that carries out social production and operation activities,enterprises(especially those with heavy pollution)should take the initiative to assume social responsibility,including environmental protection responsibility,and play their due role in achieving sustainable development in China.Executives are the makers and executors of enterprise strategic decision-making.Executives’ behavior has an important impact on enterprise management.For a long time,salary incentive for executives is an effective means to solve the principal-agent problem,but it can also be seen that the salary of executives of Listed Companies in China is not proportional to the social responsibility of enterprises,and the problem of corporate social responsibility is frequent.Therefore,it has become an urgent need for modern enterprises to study the relationship between salary incentive for executives and the fulfillment of social responsibility.At the same time,the existing literature often ignores the supervisory and restrictive role of internal control quality in business management when studying the relationship between executive compensation incentives and corporate social responsibility.Why do enterprises still have frequent social responsibility deficiency under executive compensation incentive mechanism? Is internal control quality a key factor in the impact? This paper attempts to study the relationship between executive compensation incentives and social responsibility fulfillment from the perspective of internal control quality mediation effect.Firstly,this paper summarizes the research literature of domestic and foreign scholars in order to systematically review the current research situation,and then clarifies and understands the concepts of executive compensation incentive,internal control quality,social responsibility fulfillment and mediating effect test.On the basis of principal-agent theory,corporate governance theory,stakeholder theory and signaling theory,this paper puts forward the hypothesis and establishes pluralism regression model about the relationship between executive compensation incentive and the fulfillment of social responsibility,the relationship between executive compensation incentive and the quality of internal control,the relationship between the quality of internal control and the fulfillment of social responsibility,and whether the quality of internal control has mediation effect.In order to enhance the persuasiveness of the empirical test,this paper uses multiple regression method and mediation effect test process,and takes panel data of heavy polluting enterprises in China from 2010 to 2016 as samples,carries out empirical test on the hypothesis of this paper,and carries out further analysis on the nature of actual controllers and the fulfillment of environmental responsibilities.Finally,this paper carries out robust test and draws conclusions.The research finds that Executives’ salary incentive can promote enterprises to fulfill their social responsibility,and the quality of internal control has mediation effect.Further analysis shows that,compared with non-state-owned enterprises,the implementation of executive compensation incentive in state-owned enterprises can more effectively promote corporate social responsibility,and the mediation effect of internal control quality is more significant;the implementation of executive compensation incentive in heavily polluting enterprises can also promote corporate environmental responsibility,and the quality of internal control still has mediation effect.Finally,according to the conclusions of the study,the paper puts forward policy recommendations from the government level and the enterprise level respectively.This paper considers the impact of executive compensation incentives on social responsibility fulfillment from the perspective of mediation effect of internal control quality,expands the depth and breadth of relevant theoretical research,and has important enlightenment for clarifying the relationship between executive compensation incentive,internal control quality and the fulfillment of social responsibility,and promotes heavy pollution.It is of great significance to improve the salary incentive mechanism and internal control system and better fulfill social responsibility.