The Influence Of Executive Team Composition On Inefficient Investment After Family Business Succession

Investment is essential to the survival and development of enterprises.As an important component of Chinese private enterprises,family firm is at the peak of intergenerational inheritance.Inheritance brings about changes in the composition of senior management team,which will also affect the investment activities of enterprises.The author focuses on two types of executives who act as “remonstrators” in this process.On the one hand,based on the traditional Chinese elder culture,combined with the special time node of inheritance period,the senior executives with the oldest and longest tenure help the young second generation.On the other hand,independent directors with the status of “outsiders”,who originally played a supervisory and advisory role in the enterprise,are also included in the research scope.The above phenomenon is relatively common in the succession of Chinese family enterprises.But unfortunately,most of the existing theories study the impact of the entire executive team on the organization when the second generation takes over.Research on this particular point in time after family business succession rarely focuses on one type of executive.That is,there is a lack of specific research on this phenomenon.So this paper tries to make up for this deficiency.Nielsen(2010)points out that all aspects of diversity do not affect team decisions and firm performance in the same way.Therefore,this article specifically analyzes the two kinds of“remonstration” on the family business after the inheritance of the impact.Under the influence of Chinese traditional culture,the first part of this paper focuses on the influence of the age difference and tenure difference between the senior executive elders and the second generation in the composition of the senior executive team on the inefficient investment after enterprise inheritance.The second part is to study the influence of independent directors in the team composition on the inherited enterprises.In particular,independent directors with academic and financial backgrounds are different from those independent directors who may have special interest associations.Their independence and "remonstrance" function is more significant.Based on this,this paper uses the data of 195 listed family enterprises in Shanghai and Shenzhen.Using the method of theoretical analysis and empirical research,this paper analyzes the influence of two kinds of “remonster-counsellors” on the inefficient investment of the inherited family business.First of all,based on the theory of high order to explain the influence of executive remonstration on inefficient investment.Secondly,a theoretical model is built,and descriptive statistics,multiple regression and grouping regression are used to analyze the data.At the same time,the robustness test is carried out by changing the measurement method of variable and changing the control variable.The main conclusions are as follows:(1)The greater the age and tenure difference between the second generation and senior executives,the lower the level of inefficient investment after enterprise inheritance;(2)The second-generation chairman status enhances the negative correlation between the age difference between the second-generation and senior executives and the inefficient investment;(3)The higher the proportion of independent directors with academic and financial backgrounds,the lower the non-investment efficiency of enterprises;(4)The stability of independent directors will affect the effect of independent directors’ academic and financial background on enterprises’ inefficient investment.Finally,the “remonstration” referred to in this article is a popular saying.This is due to the consideration of the role of senior executives and independent directors in the family business,as well as the comprehensive consideration of the brevity of the topic and the degree of compatibility of the content.But the term “remonstrance” may cause readers to misunderstand.In order to avoid controversy,this paper tries its best to explain in the text writing.