Research On The Synergy Effect Of Corporate Governance And Social Responsibility On Financial Performance

Financial performance is whether the company's strategy and its implementation are contributing to the business performance.As one of the important indicators to measure business performance,financial performance can reflect the control of corporate costs,the efficiency of the use of assets and capital,and the return efficiency of shareholders' equity.Enterprise managers can summarize the historical operations based on their financial performance,and make certain judgments and plans for the future direction of the company.The financial performance determines the survival of the company in the near future to a certain extent.When the company has serious liquidity problems such as insolvency,the company will probably face collapse and bankruptcy if it doesn't take any appropriate measures;and when the financial performance is good,business operations can easily enter a virtuous cycle,which will contribute to the sustainable development of the company.Corporate governance and social responsibility are both arise from the birth of a modern corporate system,but it focuses on the relationship of power and responsibility between different entities.Corporate governance stems from the separation of corporate ownership and management.It is a power and responsibility arrangement for reducing agency costs,preventing agent moral hazard and adverse selection.It regulates the entire enterprise from the perspectives of equity structure,management governance,and board governance,and can coordinate the relationships among various stakeholders within the organization.Corporate Social Responsibility was derived from personal social responsibility.The concept is closely related to the current social environment and the development of enterprises and is being gradually accepted by Chinese companies.Under the current situation of China's economic development,enterprises' active implementation of social responsibility activities will positively impact the competitiveness and overall value of the company.However,the cost of human,material,and financial resources from the implementation of social activities will bring burden to the financial performance of the company.From the point of coordinated stakeholders,corporate governance focuses on coordinating the interests of owners and operators.Social responsibility focuses on the coordination of the relationships between the society and the company as a whole.From the perspective of corporate development,corporate governance is continuously developing,together with social responsibility.It will have a significant impact on financial performance.It is of great significance to study the synergy impact of corporate governance and corporate social responsibility on corporate financial performance.In this regard,the following studies were conducted:(1)the impact of corporate governance on financial performance;(2)the impact of social responsibility on financial performance;and further discussion on:(3)the synergy effect of corporate governance and social responsibility on financial performance.This article takes the A-share listed company's data from 2014 to 2016 as an example to conduct an empirical study:Select asset return rate as an indicator of financial performance;select equity concentration,executive incentives,and proportion of independent directors as corporate governance indicators,scoring corporate social responsibility based on stakeholder theory,and then two major categories of eight groups of multiple regression models were established to study the impact of corporate governance and corporate social responsibility on corporate financial performance.The research results show that the current corporate social responsibility behavior has a positive impact on the financial performance of the company,which contributes to the short-term and long-term development of the company's performance;executive incentives and equity concentration have a positive relationship with the financial performance of the company.Corporate governance and corporate social responsibility have a synergistic effect on the company's long-term financial performance.Based on the research conclusions,the following suggestions are given in this paper:(1)companies need to establish a social responsibility perspective and perform social responsibility duties;(2)companies need to optimize the corporate governance system in accordance with the concept of social responsibility;(3)The government and regulatory agencies establish a sound society responsibility supervision and protection mechanism.