Management Power,internal Control And The Perks

According to the principal-agent theory,the ownership of the company is separated from the actual operation right,and the owner of the company transfers the control right to the professional manager.Professional managers play the role of enterprise management in enterprises.Management also bring the corresponding power,as their power increases,they may increase personal opportunism and even lead to corruption of executives in order to meet personal interests.Such behavior will significantly increase the agency cost of enterprises.Due to the concealment of on the perks,excessive job consumption has become the hotbed of corruption,so it is necessary to study on the job consumption.Is management power increasing on the job consumption?As an important institutional arrangement of modern enterprise management,Effective internal control is also an important guarantee for promoting the legal,the compliant,the effective and the ordered business activities.We studied whether internal control can effectively prevent the risk of on the peeks as a result of the concentration of management power.Through this article,we know that the greater the managerial power is,the more serious the executive rent seeking for self interest motivation,and the more extravagant consumption on the job is.Internal control can control the power of management by three steps,namely,beforehand prevention,control in events and afterwards supervision,so as to reduce the occurrence of executives' extravagant consumption.This provides the Empirical support for the "Governing the country by law,anti-corruption and clean government" advocated by President Xi.This paper is based on previous studies on the theory of on-the-job consumption.Combining with the realistic background of our country,Based on the principal-agent theory,the information asymmetry theory and the management power theory,we made the theoretical analysis and put forward the research hypotheses.We used relevant data and multiple regression models and studied the effect of the perks driven by managerial power in the capital market of China.Then we further analyzed whether the internal control can effectively inhibit the perks driven by the power of management and compared the influence of managerial power on the perks under different property rights.Specifically,this paper selected the main board listed companies in 2012-2016 years.First,we build an index system to measure the size ofmanagement power through three variables,namely,whether chairman of the board and general manager is the same person,executive's term of office and the equity concentration.The perks is the difference between perks and the expected normal job consumption of executives determined by economic factors.From the two perspectives of executive power and internal governance,we investigated the influence of managerial power on perks and the role of internal control on the relationship between managerial power and perks.At the same time,it compared the influence of management power on the perks under the different property rights.The following studies are as follows:(1)The greater the power of the management,the higher the perks are.(2)Relative to the high quality of internal control,the positive correlation between management power and the perks is more significant when the quality of internal control is low.(3)Compared with private enterprises,the positive relationship between managerial power and the perks in state-owned enterprise is more significant.