Vertical Concurrent Appointment Of Senior Executives And Company Violations

The rapid development of the socialist market economy promotes the continuous expansion of the capital market.More and more companies are robbing market resources through listing.Some listed companies frequently violate the rules in order to obtain more benefits,disrupting the orderly transactions in the capital market and disrupting investors’ interests.Judgment,seriously hinder the development of the market economy.The lack of integrity of managers,lack of checks and balances at all levels of power,dereliction of duty by senior executives,and a false board of supervisors are the internal motivations for the company’s violations,while the external regulators are ineffective in supervision,auditors violate professional ethics,and the impact of environmental uncertainty on profits is the external motives for company’s violations.The governance of violations should start at the source,and take some governance measures to prevent managers from manipulating interests due to lack of integrity and lack of supervision.As a common governance model in listed companies,vertical concurrent management will have different effects: on the one hand,it can enable shareholders who only enjoy the company’s profit and dividends to participate in the company’s operations,strengthen the supervision of managers’ dishonesty and dereliction of duty,Alleviate the problem of management agency;on the other hand,make the relationship between shareholders and managers more closely,resulting in convergence of interests,hollowing out behavior,and increased risk of breach of trust and dereliction of duty with the management.So,is the vertical concurrent management of senior executives suppressing corporate violations by effectively supervising and restraining managers’ behavior,or colluding with managers to promote corporate violations?Therefore,this paper selects my country’s A non-financial listed companies from2009 to 2019,and studies whether the vertical concurrent appointment of senior executives promotes or inhibits corporate violations.Through the analysis of agency theory,the agency cost variable is added to construct an intermediary model to discuss the influence path and effect of agency cost on vertical concurrent appointment of senior executives and company violations.In addition,the degree of ownership concentration,the nature of property rights and the chairman and general manager are held by different people may affect the relationship of vertical concurrent appointment of senior executives and company violations,need further research on the moderating effect of these three variables.Research conclusions show that: First,the vertical concurrent appointment of senior executives has an inhibitory effect on the company’s violations.This inhibitory effect is attributed to the strengthening of the supervision of the major shareholders on the executives,which inhibits the behavior of managers using power for personal gain.Also,the information exchange between shareholders and listed companies is more efficient,let supervise managers make more scientific decisions to reducing agency costs between managers and shareholders.Second,the more concentrated the equity of listed companies,the weaker the inhibitory effect of vertical concurrent executives on company violations.The higher the shareholding concentration of listed companies,the weaker the major shareholders strengthen the supervision of managers,so that shareholders may use their control power to direct managers to make decisions,and there is a potential risk of violations.Third,vertical concurrent appointments of senior executives in non-state-owned enterprises can effectively curb company violations,but state-owned listed companies have capital invested by the state,and the regulatory environment is stricter,and the risk of violations is inherently low,the influence of vertical concurrent appointments on company violations is not significant.Fourth,in a listed company where the two positions of chairman and general manager are separated,the vertical concurrent position of senior management can strengthen the supervision effect between the two,reduce egoism,restrain the violation of the chairman and the general manager,and restrain the company from breaking the rules.The conclusion of this paper enriches the related research on vertical concurrent appointment of executives and corporate violations,and reveals that vertical concurrent executive appointments can govern corporate violations,reduce the risk of listed companies’ violations,and provide a theoretical basis for listed companies’ governance of violations.