Research On The Effect Of Corporate Governance Structure On Financial Risks

In today's era,the fierce competition among companies is getting higher and higher.While chasing high profits and high performance,the financial risk factors faced by most companies have become higher and higher,becoming an important factor that threatens the survival and development of the company.Therefore,analyzing the reasons for the formation of corporate financial risk and how to take effective measures in a timely manner and to prevent and control corporate financial risks have become an important aspect of corporate research.The factors that affect financial risk include both internal controllable factors and external uncontrollable factors.The internal factors mainly come from the incomplete corporate governance structure,the company's low operating and management efficiency,the company's high leverage,the company's poor profitability,and the weak liquidity of funds.The external factors that companies face are mainly the direction of the country's policies and the degree of prosperity of the industry.With regard to internal factors,the governance structure of modern companies has become more complex with the development of modern society and the diversification of corporate forms.Recently,due to the lack of effective corporate governance,corporate financial crisis has become more and more common.Based on this,it is necessary to study the factors that affect financial risks from the perspective of corporate governance.The research on the impact of corporate governance on financial risks by foreign scholars has become more in-depth,and its theoretical and practical world has a very close relationship;while our country's research in this area is too late to start,and most of them only return from a single variable.The analysis does not analyze the influence factors of multiple corporate governance and therefore has greater limitations.Therefore,in order to better study these aspects and make the research conclusions more practically meaningful,based on a series of theoretical foundations.This article selects 345 listed A-share companies in China as a research sample.In order to accurately measure the financial risk coefficient of the dependent variable company,it borrows from the Z value model constructed by Altman(1968)in theUnited States,and separately adopts the equity structure variables(equity concentration and ownership),Board structure variables(board size,ratio of independent directors,general manager and chairman of the board of directors),executive incentive variables(salary incentives,senior management shareholdings)as independent variables,and the selection of firm size and return on assets Factors such as asset turnover,growth,industry variables,and annual variables were used as control variables to construct a multiple linear regression model to study the impact of various factors on financial risks.The results show that equity concentration positively influences the company to avoid financial risks;the nature of equity is that private enterprises have higher financial risks;the greater the size of the board of directors will be unfavorable for the company to circumvent financial risks;the higher the proportion of independent directors will be more beneficial to corporate finances.The avoidance of risk;the chairman and general manager of a company with separate person in charge helps the company to avoid financial risks;and in the aspect of executive incentives,the two variables of senior management shareholding and executive compensation are all positive to the company's financial risk aversion.The promotion effect shows that strengthening corporate executive incentives will help companies avoid financial risks.This article proposes several suggestions:(1)Optimize the ownership structure and strengthen the supervision of the behavior of managements.(2)Compared with state-controlled listed companies,private listed companies should strengthen the prevention of corporate financial risks.(3)Based on the "Company Law",based on the actual conditions of the company,build a board structure that meets the company's actual needs,including the size of the board of directors and the proportion of independent directors.(4)Establish an effective senior management incentive mechanism to promote the responsibility of senior management personnel and strengthen the senior management's awareness of corporate financial risk prevention and management efficiency.