RESEARCH ON THE INFLUENCE OF BOARD STRUCTURE TO THE INTERNAL CONTROL OF JOINT VENTURE COMPANIES: BASED ON THE MODERATING ROLE OF TOP MANAGEMENT POWER

Main Article Content

Shanshan Wang

Abstract

As the core of corporate governance, the board of directors is an important factor influencing the level of internal control in joint ventures and it has great significance in the sustainable development of listed companies of Sino-foreign joint ventures. An empirical study of 148 Sino-foreign joint ventures in Shanghai and Shenzhen during the period from 2010 to 2015 was performed, and this paper studies
the moderating effect of senior executive power on the relationship between the board composition and internal control. The study reveals that the moderating mechanism of each agency indicators of the board composition on internal control via the use of the econometric model based on non-equilibrium panel data. By allowing for the possible biases caused by the conductor’s subjectivity in the implementation of internal control, and combining the multi-factors interaction and the joint ventures executive characteristics, three dimensions of the board composition including size, independence and the number of directors appointed by the parent company were selected. According to the research results, it can be found that the power of senior executives negatively moderates the relationship between the independence as one of the agency indicators of the board composition and the internal control. This result reflects that, as the moderator between the proportion of independent directors and internal control, the power of the senior executives in the joint venture has weakened the effect of independence on internal control. However, the moderating impact of executive power on the relationship between the other two agency indicators of the board composition, the size of the board of directors and the number of directors appointed by the parent company and internal control, are not significant.

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How to Cite
Wang, S. (2019). RESEARCH ON THE INFLUENCE OF BOARD STRUCTURE TO THE INTERNAL CONTROL OF JOINT VENTURE COMPANIES: BASED ON THE MODERATING ROLE OF TOP MANAGEMENT POWER. Chinese Journal of Social Science and Management, 3(1), 25–39. Retrieved from https://so01.tci-thaijo.org/index.php/CJSSM/article/view/199619
Section
Research Articles

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