Research On No Actual Controller,Internal Control Quality And Enterprise Sustainable Development

Since the reform and opening up,the phenomenon that listed companies in China’s capital market are dominated by one share is widespread.The actual controller of a company often has the right to actually control the listed company and has absolute control over the company’s business decisions.Previous studies have shown that the actual controller of an enterprise can motivate and supervise the internal managers,alleviate the first type of agency problem between the internal management and external shareholders,strengthen the effectiveness of the operation of the enterprise’s internal control procedures,improve the quality of the enterprise’s internal control,and reduce the possibility of excessive encroachment of the enterprise’s interests by the management.However,with the continuous improvement of China’s capital market,the equity structure of listed companies has become more and more diversified in recent years,and there are more and more enterprises without actual controllers.In such listed companies where the actual controller is missing,the management becomes the internal controller of the enterprise,which weakens the supervision of external shareholders to a certain extent,strengthens the "management entrenchment",leads to more serious agency conflicts,damages the quality of internal control,affects the operating efficiency and effect of the enterprise,and thus adversely affects the long-term development of the enterprise.At present,China is in the key transformation stage of high-quality development,and the main enterprises in the market are facing unprecedented challenges.It is more important to promote the sustainable development of enterprises.According to previous studies,enterprises can design and implement effective internal control systems to improve the quality of internal control,promote enterprises to complete their development strategies,and promote enterprises to achieve sustainable development.So,with the increasing number of enterprises without actual controllers,how about the internal control quality of listed companies without actual controllers?What is the relationship between its internal control quality and the sustainable development of the enterprise? How to realize the sustainable development of enterprises without actual controllers?Based on this,this paper is based on principal-agent theory,internal control theory and stakeholder theory,and takes the A-share listed companies in China’s capital market from 2009 to 2021 as the research sample to test the impact of enterprises without actual controllers on their sustainable development.The study found that no actual controller significantly inhibited the sustainable development of enterprises.The mechanism test results show that no actual controller has a negative impact on the sustainable development of enterprises by intensifying the agency problem and weakening the quality of internal control.The heterogeneity test found that in the enterprises with higher management capacity,lower average age of management,smaller board size,and two managers,the inhibition effect of no actual controller on the sustainable development of enterprises is more significant.This paper provides some empirical evidence for enterprises without actual controllers in the capital market supervision,and also provides a reference for promoting the sustainable development of enterprises and further improving the capital market.