Research On The Relationship Between Executive TEAM Characteristics,Effectiveness Of Internal Control And Corporate Performance

With the increasingly complex external environment and the increasingly fierce competition,people pay more and more attention to the quality of the top management team and its management decision-making level,the internal control mechanism and its effectiveness,the level and change of enterprise performance and the relationship between them,which determine the survival and development of the enterprise.Some listed companies blindly pursue corporate performance,executives ignore the internal control system,and even use fraud means to make financial fraud,whitewash statements,which not only damages the interests of shareholders,but also ultimately leads to corporate bankruptcy.In today's changing capital environment,in order to achieve the expected performance goals,enterprises rely on external capital to create value,and optimize their own internal management to promote the growth of enterprise performance is a more cost-effective way.The senior management team of listed companies often holds a lot of internal information.They make decisions on the strategy and operation of enterprises,control the development direction of enterprises,and have an important impact on the effectiveness of internal control and enterprise performance.Based on the literature review on the characteristics of the senior management team and corporate performance at home and abroad,this paper finds that although scholars have more research on the characteristics of the senior management team,due to the different definition of the connotation of the characteristics of the seniormanagement team,the research conclusions on the relationship between the characteristics of the senior management team and corporate performance are quite different.Foreign scholars pay high attention to the internal control of enterprises.The research results about the relationship between the effectiveness of internal control and enterprise performance are almost the same.They all think that there is a positive correlation between the effectiveness of internal control and the level of enterprise performance.Due to the lack of relevant domestic laws and regulations and the imperfect development of the securities market,the construction of the internal control system of enterprises started late,and few scholars have studied the relationship between the characteristics of the senior management team and the effectiveness of internal control,while the research literature on the intermediary variables between the characteristics of the senior management team and the performance of enterprises is less.This paper focuses on the intermediary effect of the effectiveness of internal control between the characteristics of senior management team and corporate performance.This paper selects the data of A-share listed companies in Shanghai stock market from 2015 to 2017,selects the three dimensions of the characteristics of the senior management team as explanatory variables: the average age of the senior management team,the average education level of the senior management team and the average tenure of the senior management team,and takes the enterprise performance as the explained variable to study the relationship between the characteristics of the senior management team and the enterprise performance.First of all,we put forward reasonable hypothesis,then add the intermediary variable of internal control effectiveness,and study the relationship between the three variables.Finally,the following conclusions are drawn: first,the average age of the senior management team,the average educational background of the senior management team and the average tenure of the senior management team are all positively related to the enterprise performance.Secondly,the average age,education and tenure of seniormanagement team are positively related to the effectiveness of internal control.Third,the better the effectiveness of internal control,the better the enterprise performance.Fourth,the effectiveness of internal control in the average age of the senior management team,the average educational background of the senior management team,the average tenure of the senior management team and corporate performance has some intermediary effect.That is to say,the average age of senior management team,the average educational background of senior management team and the average tenure of senior management team indirectly affect corporate performance by influencing the effectiveness of internal control.According to the research results,this paper puts forward the following suggestions: first,optimize the internal structure of the senior management team.Enterprises can appropriately change the previous recruitment methods,optimize the internal structure of the senior management team,appropriately increase the proportion of the older senior management team,tend to include talents with higher education into the management team,and appropriately extend the term of office of the members of the senior management team,all of which can optimize the internal structure of the senior management team.Second,the senior management team should strengthen the construction of internal control system.In the construction of internal control system in the enterprise,senior managers should play an exemplary role,lead all employees to attach importance to the construction of internal control,and establish a scientific,effective and adaptive internal control system with the enterprise itself.Third,the government and various regulatory departments should continue to strengthen the supervision of the internal control of enterprises.For enterprises that have done a good job in the effectiveness of internal control,the government should encourage and provide some support,issue some incentive and restraint measures for the implementation of the internal control of listed companies,and mobilize their enthusiasm.