Study On Moral Hazard Risk Of Ceos In State-owned Companies

Since the reform and opening up, with the gradual establishment of the socialist market economic system and the continuous development of China's economy, a group of entrepreneurs with Chinese characteristics have gradually come into being in our state-owned enterprises. Among them, managers of central enterprises as a particular social group, whose political status, economic status and social status have been generally acknowledged by our society due to their extraordinary performances during the past three decades, have become one of the most admirable jobs. However, while the deepening of the reform is still on the way, due to the lagging behind of professional managers market, inadequate incentive and restraint mechanisms, as well as entrepreneurs'own faults, a number of notorious events like ripping off state-owned assets and dereliction of duty happened, which had not only tremendously affected their enterprises, but also resulted in wide negative social effects and political consequences. This indicates that the professional ethics risk of the central enterprises managers has become the main constraints to the normal growth and operating efficiency of the state-owned enterprises. The purpose of this paper is to reveal the mechanism of moral hazard of the central enterprises managers, establish monitoring and early-warning mechanisms of moral hazard behavior, thus to avoid or to reduce the moral hazard behavior and consequences of the central enterprises managers.Based on an empirical analysis of the ethical behavior of central enterprises managers, with the application of relevant theories of economics, management, psychology and ethics, this paper reveals and validates the causes, processes and typical behavior characteristics of moral hazard behavior of central enterprises managers, defines the concept of moral hazard behavior of central enterprises managers, and sets up a management behavior analysis model, which is a three-dimension comprehensive test including economic responsibility, political responsibility, and social responsibility. By analyzing the formation mechanism and triggering factors of a typical moral hazard behavior with the three-dimension model, this paper reveals the blocking and control paths, puts forward ways and paths to establish moral hazard early-warning management mechanism, and designs the structure and measurement of early-warning indicator system. And from the perspective of state-owned assets management, it puts up public policy recommendations to prevent central enterprises managers from moral hazard behavior. This paper is divided into four parts and eight chapters.The first part, consisting of Chapter 1 and Chapter 2, proposes the research topics, reviews the literature of relevant basic theories, sets the research objectives, research programs, and lays the foundation for the study. The first chapter is about research objectives, research significance, as well as research methods. Chapter 2 reviews the literature of relevant basic theories on moral hazard of enterprise managers.The second part, including Chapter 3, Chapter 4 and Chapter 5, conducts basic theoretical research and empirical analysis on moral hazard of central enterprise managers. It is the core part of this paper. The third chapter discusses the basic analytical model on moral hazard behavior of central enterprise managers, the evaluation of moral hazard behavior by political responsibility, economic responsibility, and social responsibility. The fourth chapter is an empirical analysis on moral hazard behavior of central enterprises managers with sample survey and thematic interviews.856 questionnaires are handed out to central enterprises leaders, experts and scholars, and state assets supervisors respectively. The results of the survey verified the reliability and feasibility of establishing regulatory standards of moral hazard behavior with the three-dimension model of political responsibility, economic responsibility, and social responsibility. The fifth chapter discusses the formation mechanism of moral hazard behavior of managers, the internal and external factors and triggering factors of moral hazard behavior, and specifically analyzes the relationship between typical burnout behavior and moral hazard.The third part, which includes Chapter 6 and Chapter 7, discusses the establishment of moral hazard early warning management mechanism for central enterprises managers. It is the main content of the paper. The sixth chapter discusses the objectives, principles and methods of the establishment of moral hazard early-warning mechanism for the central enterprises managers. By focusing on economic responsibility, political responsibility and social responsibility, it designs a central enterprises moral hazard early-warning indicators structure and specific measurement methods. In Chapter 7, it puts forward recommendations for the central enterprises to establish moral hazard early-warning mechanism of their managers.The fourth part is the conclusion and outlook of the whole paper. It describes the main research conclusions and innovation points, states deficiencies and their causes, and illustrates the expectations and outlooks of the forthcoming job for this paper.This paper is the main research work of the topic "Moral Hazard Risk Warning Model of CEOs in State-Owned Enterprises", which is commissioned by Chinese Administration Union for Reform.