The Impact Of Executive Incentives,Internal Control Quality On The Risk-Taking Of Enterprises

In the 40 years since reform and opening up,China's economic and social development has made great achievements that have attracted worldwide attention.Enterprises play a mainstay role in the process of economic development,and executive decision-making as the actual helm of an enterprise is directly related to whether the entire enterprise can run smoothly and be profitable.Conflicts based on the principal-agent relationship have always been a classic problem in academic research.As an important mechanism to alleviate the principal-agent contradiction,executive incentives play a vital role in the future development and value realization of enterprises.In the capital market,shareholders often behave as risk appetites in order to maximize their own interests,while executives generally show risk aversion in order to ensure the stability of their work and income.This difference may lead to executives choosing to be relatively conservative against the wishes of shareholders Investment projects,thereby affecting the development of the enterprise.According to the research results of incentive theory,an effective incentive mechanism can bring the interests of shareholders and executives closer to each other,and improve the risk-taking level of the enterprise.As a double-edged sword,risk can bring benefits to the enterprise and may also lead to bankruptcy.The financial crisis that broke out in the United States in 2008 caused in-depth research on corporate risk-taking by people from all walks of life.A large number of facts show that the reason why the United States fell into a major financial crisis is because most companies bear too much risk.At this time,the internal governance mechanism of the enterprise becomes particularly important,and internal control,as a core component of the internal governance mechanism of the enterprise,plays an important role in regulating behaviors and avoiding risks.Therefore,based on the realistic background of Chinese enterprises,this article focuses on the principal-agent problem between executives and shareholders,and integrates the construction of the company's own internal control system.Affect the relationship between commitments.The research sample selected in this article is the data of China's A-share listed companies from 2014 to 2018,using both theoretical and empirical research methods.In the process of research,first review and review the existing domestic and foreign literature,and then from a theoretical perspective,explore the internal relations between executive incentives,internal control quality,and corporate risk-bearing,as well as executiveincentive and internal control quality.The impact of the individual and interaction on corporate risk commitment,and at the same time put forward corresponding assumptions.Through empirical analysis,the research results show that:(1)Executive compensation incentives and corporate risk commitment have a significant positive correlation.Corporate risk commitment increases with the increase of executive compensation incentives;(2)executive equity incentives are positively correlated with corporate risk commitments;(3)internal control quality is negatively correlated with corporate risk commitments;(4)internal control quality The higher,it can weaken the positive correlation between executive compensation incentives and corporate risk taking;(5)The positive correlation between executive equity incentives and corporate risk taking will slow down with the improvement of the quality of internal control.At the end of the article,several policy suggestions are given based on the research results,and the shortcomings of the research content of this article and future research prospects are explained accordingly.