Information Disclosure Quality Improvement,Board Independence And Cash Holdings Value

The fact that cash is in the enterprise is like blood to the individual,and its importance is self-evident.In recent years,with the rapid development of the economic environment and the ups and downs of international capital flows,cash as the "blood" of corporate life has become more and more prominent in ensuring the continuous and stable development of enterprises with a continuous supply of energy.In academia,the research on corporate cash holding decisions and the factors affecting the holding of cash by enterprises and their economic consequences have been deeply concerned by scholars at home and abroad.The cash issue has become one of the hot issues in academic research today.In the practice world,since the outbreak of the global financial crisis in 2008,more and more domestic and foreign listed companies have adopted the financial concept of “cash is king” as a standard.According to the efficient market hypothesis,the cash holding value refers to the actual efficiency of the cash held by the company after the market evaluates the cash.The value of corporate cash holdings depends on the trade-off between the benefits and costs of the company's holdings of cash.Such trade-offs are not only related to the company's financial characteristics,but more importantly,they are also affected by the effectiveness of corporate governance.In the perfect market,for every dollar increase in corporate cash holdings,the corresponding value is also one dollar.However,depending on the actual situation,different companies will have completely different cash holding values because of different levels of internal and external corporate governance.At present,with the development of China's capital market,the separation of enterprise ownership and management rights,so that shareholders with actual control rights are not directly involved in corporate governance activities,and management exercises the executive power.However,cash,the most readily exploitable asset,may result in wasted investment or so-called imperial construction due to management's selfinterest considerations,resulting in reduced efficiency.For example,in the case of corporate governance failure,management's implementation of investment behavior and mergers and acquisitions that damage the value of shareholders may be more frequent,which leads to a large amount of capital wasted,and ultimately the phenomenon of low cash holdings of enterprises.In this research context,this paper improves the agency conflicts between enterprises and reduces the agency costs between shareholders and management to improve the value of corporate cash holdings.The improvement of information disclosure quality,as a dynamic process reflecting the degree of information asymmetry,can more fully and objectively reflect the effect of the agency problem between the dynamic management of shareholders and managers,but the current influencing factors of cash holding value There are few involved in it.Therefore,this paper will explore its impact on the value of cash holdings from the perspective of quality improvement of information disclosure.In addition,the mitigation of corporate agency problems is not only due to the influence of external supervision,but also further eased due to the rational and effective internal governance mechanism of the enterprise.As the executive body of the company's power,the value of the board of directors in the company's operation process is becoming more and more important.As a very special board of directors,independent directors can maintain a more neutral opinion on the decisions made by the management of the company.This prevents management from invading corporate resources.Therefore,this paper will study the impact on the cash holding value of enterprises from the above two aspects.And based on the support of existing literature research,the independence of the board of directors can help improve the quality of company information disclosure.Therefore,it is reasonable to expect that the improvement of the independence of the board will enhance the positive relationship between the improvement of information disclosure quality and the value of cash holdings.In order to test the impact of information disclosure quality improvement on cash holding value,and further analyze the role of board independence in this impact,this paper selects A-share listed companies of Shenzhen Stock Exchange from 2008 to 2017 as research samples and research information.Disclosure of the relationship between quality improvement,board independence and cash holding value,the relevant conclusions are as follows:(1)The quality improvement of corporate information disclosure is positively related to the value of cash holding.Specifically,on the one hand,high-quality information disclosure can effectively reduce private-sex behavior caused by information asymmetry;on the other hand,the improvement of information disclosure quality can improve the transparency of corporate information,so that management's attempt to obtain cash from the company can be timely.Exposing to the perspective of shareholders and the public,triggering the operation of the reputation mechanism,prompted management to serve the company heartily for personal reputation.(2)The independence of the board of directors is positively related to the value of cash holdings.That is,the stronger the independence of the board of directors,the higher the value of cash holdings.This is because the independence of the board of directors can play its role in governance through supervisory control functions and decision-making advisory functions.(3)The improvement of the independence of the board of directors will enhance the positive relationship between the improvement of the quality of information disclosure and the value of cash holdings of enterprises.This means that the independent performance of the board of directors promotes the improvement of the quality of cash disclosure.The reason is that the effectiveness of internal governance mechanisms can improve the effectiveness of certain specific external governance mechanisms.Among them,the independence of the board of directors as one of the company's important internal governance mechanisms can strengthen the quality of information disclosure.Based on the above conclusions,this paper puts forward relevant suggestions:(1)Pay attention to the quality of corporate information disclosure and improve the quality improvement mechanism of information disclosure.(2)Improve the transparency of corporate information and increase the supervision mechanism of third parties.(3)Enhance the independence of the board of directors and improve the internal governance of the company.(4)Strengthen the moral cultivation of employees and create a corporate integrity atmosphere.