The Research On Executive Incentives,Internal Control And Corporate Innovation Performance

In the current complex environment,innovation is widely regarded as the main factor of national economic growth,and sustainable innovation capabilities have become to a large extent the necessary conditions for companies to survive and develop.In modern enterprise organizations,the separation of the two powers determines that executives with the right to allocate resources are important organizers and promoters of company innovation activities.Because corporate innovation activities often have high risks and uncertainties,executives are not motivated to innovate.Therefore,the perfect incentive mechanism is the main driving force to guide the management of innovation activities,and it is an important measure to improve the innovation performance of enterprises.On the other hand,the internal control environment of a company is a mechanism to protect the interests of equity,and it is also a key factor to ensure that the incentive function of executives is effectively exerted.With the promulgation of the "Basic Standards for Enterprise Internal Control" and "Supporting Guidelines for Enterprise Internal Control",internal control has gradually become an important means of corporate governance,playing an important role in the prevention of corporate risks and the allocation of resources.Internal control,as a control mechanism for checks and balances,helps curb executives' adverse selection and self-interest behavior,and create a good environment for corporate innovation.This article is based on principal-agent theory,incentive theory and innovation theory,and uses a combination of normative and empirical analysis methods to study this dilemma.It starts with executive incentives and studies whether the effectiveness of executive incentives will promote the improvement of corporate innovation performance.Secondly,study whether high-quality internal control can promote enterprise innovation performance by controlling risk factors in the innovation process.Finally,this paper investigates whether the role of executive incentives in boosting corporate innovation performance will increase under the conditions of effective internal control.The empirical results show that: First,executive incentives have a positive role in promoting the improvement of corporate innovation performance.That is,in the current economic environment in China,no matter whether short-term salary incentives or long-term equity incentives are implemented for executives,they can prompt executives to actively engage in innovative activities and consider the realization of the company's long-term value.Second,internal control also plays a positive role in improving the company's innovation performance.That is,high-quality internal control helps to raise awareness of risk prevention,less information asymmetry,and improve the supervision system to promote innovation output.Third,under the condition of the effectiveness of internal control,the role of executive incentives in promoting corporate innovation performance will be significantly enhanced.That is,a good internal control environment can not only ensure the rationality of the executive incentive mechanism,mobilize the innovation motivation of executive members,but also moderately monitor the deviating behavior of executives and restrain their adverse selection,thereby playing an active role in the innovation of corporate strategic development effect.In summary,this article affirms the governance effect of internal control,provides a reference for the construction of listed company's executive incentive system,and provides important inspirati on for the effective development of corporate innovation activities.