Senior Executive Preferment Incentives,Internal Control And Corporate Risk Commitment

With the development of economy and continuous improvement of the market,the market risk is constantly being balanced.Especially for an enterprise,after the separation of ownership and management,the risk selection of managers becomes a core issue.Risk commitment means that enterprises in the investment decision-making of venture capital projects to choose a higher level of risk-taking shows that the management of the enterprise has the spirit of adventure and innovation,while in the daily business activities of enterprises will not take the initiative to give up high risk but the net present value For positive investment projects.Enterprises with a high level of risk-taking also reflect more input and more initiative to innovate,which is conducive to enhancing the competitive advantage of enterprises,and risk-taking can promote the long-term development of enterprises.There are many research on the influencing factors and the economic consequences of the enterprise risk appetite.There are many research on the incentive effects of the factors that affect the risk appetite.The academic circles mainly focus on the explicit incentive categories such as executive compensation.The factors about the implicit incentive now belong to a blank And to be studied state.In executive incentives,to get rid of the dominant manifestations,the other hand,forms of implicit incentives,such as the promotion of risk-taking executives have some impact on business behavior,while under normal circumstances,executives should be free to make rational decisions and even Risk taking requires a good internal governance environment,such as internal controls,as this is a must for an organization to function properly.Based on the above considerations,this paper examines the effect of the hidden pressure of promotion pressure on the corporate risk taking and the regulatory role played by internal control in the sample of 2010-2016 financial data of ShangHai and ShenZhen A-share listed companies.The results show that under the same conditions,the corporate risk appetite shows a declining trend as the pressure of executive promotion increases,that is,there is a negative correlation between executive promotion pressure and risk commitment.The higher the quality of internal control,the more it can promote the enterprise risk appetite,and the weakening of the risk appetite caused by the excessive promotion pressure can be effectively reduced.Thisshows that the pressure of executive promotion is too large is not conducive to motivate management to undertake risk-taking,and internal control can adjust its failure in the incentive effect,therefore,should pay attention to the construction of internal control and improve the quality of internal control.As an important part of the incentive method,the hidden incentive factors should be valued and rationally applied by enterprises.The study also found that at this time point in 2012,the study concluded that the internal control during the compulsory disclosure phase has a stronger regulatory pressure on the promotion pressure and risk exposure than the voluntary disclosure phase.