D&O Insurance,Innovation And Enterprise Value

The “Self-care Standards for Listed Companies” adopted by the Securities Regulatory Commission in 2002 made it clear that “listed companies may purchase liability insurance for directors and executives upon approval of the shareholders' meeting ”.In the same year,Vanke Co.,Ltd.signed a contract with China Ping An Insurance Company and became the first buyer of directors' executive liability insurance.Since then,the number of companies buying directors' liability has increased year by year but the growth rate has been slow,so that they have been marginalized in an embarrassing situation for a long time.In recent days,the emergence of the Science and Technology Board has once again brought the responsibility of the directors back to people's vision.According to media reports,13 of China's 28 science and technology board companies are insured by directors,and the insurance rate of nearly 50% seems to have some internal link.The characteristics of high-risk companies,new technologies and large fluctuations in stock prices easily trigger internal conflicts between shareholders and management,companies and stockholders,increasing the risk of lawsuits for companies and directors 'executives.More than other companies in the risk management and corporate governance needs the help of insurance companies.In order to deeply discuss the mechanism of directors 'executive liability insurance's impact on Chinese companies,this article first selects the 2009-2018 Shanghai and Shenzhen A-share listed companies as a research sample from the perspective of corporate governance,and empirically tests the relationship between directors' executive liability insurance and corporate value Inner connection.On this basis,from the perspective of technological innovation,further explore the possible path between director liability and corporate value.The empirical results show that:(1)The introduction of directors' executive liability insurance can significantly enhance the value of the company,and under different institutional environments,there are significant differences in its governance role.Specifically,in enterprises with a better legal environment and fierce competition in the product market,itsgovernance role is more significant,indicating the institutional environment foundation for directors and insurance to effectively play the governance role.(2)Technological innovation has produced a partial intermediary effect in directors' executive liability insurance and corporate value,and this intermediary effect only exists in state-owned enterprises.That is to say,after the state-owned enterprise insures the directors for liability,it can significantly improve the enterprise value through technological innovation.The contributions of this paper are:(1)Empirical test of the governance effect of directors' executive liability insurance on corporate value,and further examination of the governance differences of directors' executive liability insurance in different institutional environments,providing directors' executive liability insurance for governance The institutional environmental foundation of the mechanism has enriched the empirical research on the economic consequences of directors' executive liability insurance.(2)In-depth discussion of the intermediary role played by enterprise technological innovation in D & O insurance and enterprise value,opened the “black box” of D & O insurance affecting enterprise value,affirmed the positive impact of technological innovation on enterprise value,and directors 'executive liability insurance Incentive effect.(3)Enrich the theoretical research on technological innovation incentives in China,and provide theoretical basis and reference for the implementation of enterprise technological innovation.It has been found by empirical evidence that the intermediary effect of technological innovation mainly exists in state-owned enterprises.The introduction of directors' executive liability insurance can effectively alleviate the worries of management,increase the enthusiasm of enterprises to invest in innovation,and thus increase corporate value.Therefore,the research in this paper also brings new inspiration to the innovation promotion of state-owned enterprises.