A Study Of The Impact Of Executives’ Financial Regulatory Background On Trust Company Violations

Corporate irregularities not only reflect the problems of corporate governance,but also bring significant losses to social investors,thus affecting the reputation of the company,in some cases,the healthy development of the capital market and the stability of society.As one of the four pillars of China’s financial industry,the trust industry has undergone different historical stages,such as war,planned economy and reform and opening up,and has produced various forms of irregularities in the process of budding,declining,restoring,reorganizing and rebirth.Despite the gradual improvement of relevant laws and regulations,and the tendency for all parties to have clear authority and responsibility,violations by trust companies have not disappeared,but have increased dramatically as the scale of trusts continues to expand.The release of the new capital management policy in 2018 signals the country’s determination to rectify the chaos in the capital management industry,which makes a series of adjustments and regulations on trust business and supervision,as well as the release of the new regulations on asset management indicates the country’s determination to rectify the chaos in the asset management industry,which has made a series of adjustments and regulations on trust business and supervision,and also clarified a stricter operation specification system and regulatory system,which has pointed out the direction and caused impact on the future development of the trust industry and the transition adjustment of trust companies.Then with the release of the new regulations on asset management,the regulators have once again increased the penalties on the trust industry,which has forced the academic community to put the study of trust company violations on the agenda.Most scholars in this field have studied the relationship between executive team characteristics and corporate performance or corporate governance,while dividing executive team characteristics into two main aspects:demographic characteristics and psychological characteristics,and finding through research that executive team characteristics can have an The study finds that executive team characteristics have a significant impact on corporate behavior.Based on this,this paper focuses on the special characteristics of trust companies to study the more specific and regulatory financial regulatory context within the field of financial context to study trust company violations.Specifically,this paper takes the data of 68 trust companies in China from 201 1 to 2021as the research sample in the context of the issuance of the new regulation of capital management in 2018,and based on a differences-in-differences model,we verify whether the hiring of executives from financial regulatory backgrounds has an impact on corporate violations under the exogenous impact of the new regulation of capital management policy in 2018 and study the intrinsic mechanism of its effect and analyze the heterogeneity of its effect.The empirical results show that under the exogenous impact of the new capital management policy,the hiring of executives with financial regulatory background will have a dampening effect on trust companies’ non-compliance behavior,and the main mechanism is the personal knowledge and ability of the executives and their accumulated network resources.This disincentive effect varies depending on the nature of the firm,the nature of its equity,and the trust company’s unique level of channelization and capital investment.The paper concludes with a series of theoretical analyses and empirical test results to suggest corresponding countermeasures for trust companies in the future selection and hiring of executive teams and corporate governance.