Executive Tenure,Internal Governance And Corporate Environmental Investment

Since the reform and opening up,my country’s economy has developed rapidly,but behind the rapid economic development is the destruction of the natural environment,and the ecological environment has attracted widespread attention from all walks of life.In 2017,the report of the 19 th National Congress of the Communist Party of China pointed out that“it is necessary to establish and practice the concept that green waters and green mountains are golden mountains and silver mountains” and “treat the ecological environment like life”.Environmental protection has become the inner part of the term “beauty” in the centennial goal.Require.Heavy pollution industries are important targets of environmental governance.In recent years,the state has successively promulgated laws and regulations such as the "Water Pollution Control Law of the People’s Republic of China" and "Air Pollution Prevention Law of the People’s Republic of China".Environmental protection behaviors are also getting more and more attention.From the perspective of enterprises,there have been many literatures discussing the motivations and economic impacts of environmental protection investments by enterprises.Environmental protection investment is a decision of a company,and the senior management team has a non-negligible impact on this.Under the background of separation of the two powers,whether the company’s environmental protection investment decision will become a means for senior management to seek personal gain,and whether the company’s internal supervision and governance mechanism It can play a role in restricting the self-interested behavior of executives,and it has become a possible research direction.Starting from the first year of the CEO’s tenure,this article studies the impact of senior management’s tenure on corporate environmental investment,and discusses the restraint of corporate internal supervision and governance on this agency problem from the perspectives of board governance and equity governance.This article first properly expounds the concepts involved in the research,reviews the principal-agent theory,high-level echelon theory and other theoretical foundations,and reviews the relevant literature on the tenure of senior management,environmental protection investment and internal governance.Based on the literature reading,this article analyzes the mechanism of the impact of the CEO’s first year on corporate environmental investment,and explores the role of internal supervision and governance from the perspective of equity concentration and independent director ratio,and puts forward corresponding hypotheses.This article selects listed companies from 2010 to 2019 as a sample of heavily polluting companies,conducts empirical testing and robustness testing on hypotheses,and further analyzes environmental protection investment into capital environmental protection investment and expense environmental protection investment.The main results of this paper are as follows:(1)The first year of the CEO’s tenure is significantly positively correlated with corporate environmental investment.(2)The positive correlation between the CEO’s first year of tenure and the company’s environmental protection investment is still significant when the equity concentration or the proportion of independent directors is low,and it is not significant when the equity concentration or the proportion of independent directors is high.(3)The CEO will increase capital environmental protection investment and expense environmental protection investment in the first year of his tenure;the year before CEO resignation has no significant relationship with capital environmental protection investment,but has a significant positive correlation with expense environmental protection investment.Finally,this article puts forward corresponding policy and management recommendations based on the conclusions obtained,analyzes the limitations and deficiencies of the research,and prospects for future research directions.