The Effect Of The Faultline Of Board On The Corporate Risk Taking

Enterprise risk bearing represents the tendency to chase profits and is willing to pay the price.Facing the uncertainty of economic and social environment,reasonable choice of risk bearing level is a prerequisite for enterprise survival and development.Especially after the 2008 global financial crisis risk problem of the academic and business for companies to pay more attention to.The board of directors as the most important decision-making mechanism and management mechanism is the core of corporate governance mechanism,the composition of the board of directors directly affects the quality of business decisions.So the composition of the board of directors to the enterprise risk bearing will produce what kind of impact is a very important problem.Previous studies about the relationship between the scholars concern most is the board of directors of the board size,independent directors proportion and so on the characteristics of integrity,in recent years,some scholars begin to pay close attention to the characteristics of the members of the board of directors,but scholars studied the diversity of the board of directors,namely one or certain attributes in the members of the board of directors category,ignoring the members of the board of directors is an aggregate of multiple attribute characteristic,a collection of these different attributes can lead to faultlines of board which divide board into different subgroups.In this paper,from the angle of the faultlines of board to study the risk level of the enterprise,on the basis of social identity theory focused on faultlines analysis of enterprise risk bearing level the influence mechanism in the decision-making process,studying the effect of faultlines on risk-taking level.Based on the Shanghai and Shenzhen two city from 2010 to 2015 listed companies as the research object,using the binary regression model to study the relationship between faultlines of board and the enterprise risk-taking level,and investigated both unity and the board chairman and general manager stake in them.In this paper,the study found that:(1)the board of directors of the enterprise group and enterprise levels showed significant negative correlation between risk and the strength of faultlines of board,the greater the business risk bearing level is lower;(2)Chairman and general manager the joining together of two position in fault zone and the enterprise risk group level play a regulatory role in the relationship,that is,compared to the situation of the separation of the two when the joining together of two post group chairman and general manager fault zone and negative correlation between the level of risk is stronger;(3)the board is holding the board for groups faultlines and the relationship between the enterprise risk bearing level did not play a significant regulatory role.Research conclusion of this paper confirms the faultlines of board in the process of business decisions will produce negative effects,compared with a smaller degree of strength of faultlines;the larger strength of faultlines will significantly affect the enterprise decision-making level.So the enterprises should pay more attention to the composition of the board members,on the basis of the guarantee of the board of directors has certain diversity decrease as far as possible board group strength of faultlines.At the same time,the chairman and general manager of both separation can lower the negative influence of board faultlines.So enterprises need to reasonable arrangement of chairman and general manager,ensure the chairman of the board of directors and the board of directors really plays a role of the supervision of its corporate governance.