The Relationship Between Attribute Of Actual Controller Shareholdings Of Managers And Information Transparency

Based on present research results, it is thought that managements taking charge of the day-to-day operations of listed company have important influence to information disclosure, so a lot of researchers have been studying the transparency of information disclosure from the point of management. In this course, the researchers commonly found and gradually considered that shareholdings of managements as an incentive to solve the problems caused by the separation of ownership and managerial power has positive effects to increase the information disclosure. Domestic and overseas research's results prove that shareholdings of management makes the interest between managements and stockholder tend to become identical and is conducive to reduce agency cost, which reducing the possibility of earnings manipulation by managements and further the barrier of information disclosure. However, many of scholars found too that the actual controller of company has the same important effects to produce whether or not the positive chemical reaction between shareholdings of managements and information transparency of business accounting. Lots of scholars have been finding since 1980 that the ownership concentration commonly exists in listed companies of many countries. In 1999, some researchers including La Porta firstly found, a lot of country's listed companies have one and only ultimate controlling shareholder through reviewing the chain of ownership expect few countries, especially in the countries which giving the worse protection to the interest of investors. Actual controllers own the de facto control of listed companies by the ways of pyramid structure,voting proxy mechanism and concurrent director of board, which can make them exert important influence on the managements' routine decision and information disclosure.As far as China is concerned, due to some historical reasons, the time of Chinese market economy system is rather short and the governance mechanism of the inside and outside of listed companies has been not enough perfection, which leading the problem of actual controller's domination to listed company to be more serious. So when our government carries out the incentive plan for management, it should be considered more what the difference of Attribute of actual controller has effect to this plan, thus making the listed company rationally to use the share incentive mechanism.According to the analysis to the listed companies from 2003-2007 whose the condition of information disclosure had been assessed and announced by Shenzhen Stock Exchange, the dissertation attempts to study what different effects to the relations between the shareholdings of managements and transparency of information disclosure the two control's attribute of the listed state-owned enterprises and non-state owned enterprises can have. It is found by analysis of regression, firstly, shareholdings of managements as an incentive mechanism can reduce agency cost and effectively increase the transparency of accounting information. Due to the research's results, so far as the information transparency of business accounting is concerned, the listed companies that implementing the shareholdings of managements is better than the listed companies that have never put the incentive measure into effect. Secondly, Attribute of actual controller has effect to the information transparency of business accounting. It is concluded by empirical research, in respect of the information transparency of business accounting of Chinese listed company, that the listed state-owned enterprises is better than the listed non-state owned enterprises, which is contrary to the common knowledge that the disadvantage of state-owned enterprises' system must lead to low quality of accounting information. Thirdly, Attribute of actual controller can influence the relations between the shareholdings of managements and the information transparency of business accounting. It can be found by data examination and study that shareholdings of managements as an incentive system in the listed state-owned enterprises has some but not remarkable effect, which may be results under the influence of the nature of the ownership of enterprise and the old ideas prevalent in times of planned economy. on the one hand, the listed state-owned enterprises is relatively conservative to adopt the shareholdings of managements as an incentive scheme to improve the management's initiative, as a result, management's enthusiasm and devotion of working is absent. On the other hand, present incentive schemes has some shortage in design, which leading the positive effect of shareholdings of managements to increase the information transparency of business accounting to be limited. On the contrary, the listed non-state owned enterprises can exactly reduce agency costs and improve the transparency of accounting information by the way of this incentive mechanism.