Keywords: internal problems of risk management of multinational companies in China
I. Introduction
For the whole world, transnational corporations are the main actors in the international economy and the engine of world economic growth. According to the statistics of the United Nations Center for Transnational Corporations, the annual output value of transnational corporations accounts for 50% of the whole world output value, and they control 40% of world production, 60-70% of international trade, 60-70% of international technology trade and 90% of foreign direct investment. For a country, multinational corporations are the pillar of a country's national economy and one of the important symbols of the country's comprehensive strength. Cultivating and developing multinational companies in China is an important part of the "going out" strategy put forward by our government, which plays an extremely important role in promoting China's transformation from an economic power to an economic power and enhancing China's comprehensive national strength. According to the statistics of the United Nations Conference on Trade and Development (UNCTAD), transnational corporations have 2,000 parent companies in Chinese mainland and 265,438+500,000 overseas branches.
At present, although the international financial crisis has not continued to spread and intensify, it is far from over, leading to drastic changes in the world economy and deterioration of the operating environment of multinational companies. The risk management of multinational companies in most developed countries has entered the stage of comprehensive risk management. Among Fortune 500 companies, 40% have implemented comprehensive risk management and 30% have implemented partial risk management. Although multinational corporations have developed rapidly in China, compared with multinational corporations in developed countries, their risk management is still in the transition process from the planning and implementation stage of risk management to some risk management stages. On the other hand, the survey of enterprise risk management shows that enterprises in China, including all kinds of multinational companies, are still in the initial stage of risk management construction: 765,438+0% enterprises have only established certain risk management processes, but they lack mutual restraint mechanisms; 65,438+05.79% enterprises "have established a complete risk management system, but the system has not yet fully started to operate"; In addition, 5.26% of enterprises "have not established risk management methods and systems, and risk prevention only depends on the sense of responsibility and personal behavior of employees". In the face of the impact of this crisis, multinational companies in the world's top 500 enterprises are still unable to do so; In order to cope with this crisis, multinational companies in China should reduce the influence of unfavorable factors in the process of risk management and further improve their risk management capabilities.
Second, the risk analysis of multinational companies in China
Analyzing and identifying the scope and categories of risks is the basic premise for multinational companies to implement risk management. When multinational companies in China engage in transnational business activities, they are faced with totally different, more complex and global uncertainties. From different angles and according to different standards, the risks faced by multinational companies in China can be classified and analyzed in different ways. In this paper, the risk classification widely used in academic circles at present is combined with Miller's integrated risk management research framework for classification and analysis: namely, according to the controllable degree of risks, the risks faced by multinational companies in China are divided into general environmental risks (macro-environmental risks) that are difficult for multinational companies to control themselves; Meso-environmental risk means that although multinational companies can't control themselves, they can exert influence to change the degree of risk impact; Enterprise variable risk (micro-environmental risk) that multinational companies can control by themselves.
Macro-environmental risk (general environmental risk)
Macro-environmental risk or general environmental risk refers to those factors that affect the transnational business environment of various industries, including first, political risk, that is, political instability is related to changes in the main factors of the political system, including political stability and ideology. Second, government policy risk refers to the instability of government policies that affect the business environment, including unpredictable fiscal and monetary reforms, changes in government rules and regulations, and restrictions on income remittance. The third is macroeconomic risk, which refers to the uncertain fluctuation of economic activity level, price level, exchange rate and interest rate level; The fourth is social risk, which means that when people face beliefs and values that are inconsistent with their own values, they may have a social crisis. Social risk may be the predecessor of political risk. Of course, these two risks belong to two different stakeholder groups-society and government. Fifth, natural condition risk refers to natural phenomena that affect economic output. For example, the influence of geographical location factors on the choice of internationalization location factors of multinational companies. Sixth, cultural risks. Scholar He believes that different cultural backgrounds determine the ways and preferences of suppliers, competitors and customers in business dealings with multinational corporations, as well as the strategies, tactics and skills of competing with multinational corporations. At the same time, in the eighth issue of 2009, it was also observed that political, legal, economic and other environmental factors played a role in the international economic cooperation of multinational corporations.
(b) Intermediate environmental risks (industrial environmental risks)
Meso-environmental risk or industrial environmental risk refers to the factors that affect the transnational operation of various industries. 1. The market risk of inputs refers to the industry uncertainty surrounding obtaining sufficient quantity and quality of inputs and putting them into production process, mainly including technology, quality, quantity and price of raw materials. The second is product market risk, which refers to the unpredictable changes of industry output demand. This change may be due to the change of consumers' taste, the change of availability of substitutes, the change of supply of supplementary products, or the change of unpredictable demand for imported goods by domestic and foreign government policies. The third is competitive risk, that is, because it is impossible to predict the number and types of products available in the product market, enterprises may suffer competitive pressure from manufacturers in the same industry, mainly including price, business strategy, instability of the selected market, threats from new entrants at home and abroad, etc. Fourth, technical risks. Miller believes that technological innovation affects the product or production process of an industry, but it also poses a threat to the industry, because it may cause confusion to the established competition and cooperation mode in the industry. Xu Hui, a scholar, believes that technological risks should also include the possibility that the proprietary technology may be stolen and illegally possessed due to the technological leadership of multinational companies in some aspects of the industry.
Micro-environmental risk (enterprise variable risk)
Micro-environmental risk or enterprise variable risk refers to the factors that can be controlled by the enterprise itself and affect transnational operation. First, production risk refers to the uncertainty of production and operation of multinational companies, including the uncertainty of labor force, the uncertainty of company input and supply and the uncertainty of production. The second is liability risk, which refers to the risks faced by multinational companies in the process of production and sales because they are responsible for product quality, environmental pollution and personal safety. Third, R&D risk. Miller said that the uncertainty of R&D behavior is the uncertainty of the time frame and project output characteristics when the company invests in R&D, and the fourth is credit risk, which refers to issues related to capital recovery, such as the recovery of accounts receivable. The fifth is behavioral risk, which refers to the selfish departmentalism of company managers or employees. Miller believes that the behavioral risk at the company level is related to the agency relationship within the company. Sixth, human resource risk, or labor uncertainty, refers to the changes in employee productivity, the effectiveness of employee training, employees and trade union problems and other risks. Seventh, transaction risk refers to the impact of exchange rate risk on the cash flow of specific and identifiable foreign currency transactions. Eighth, investment risk, that is, the concentrated expression of the continuous uncertainty of economic situation, political conditions and government policies faced by multinational companies investing in the host country. Nine is financial risk, which refers to the opportunity or possibility that the financial system deviates from the expected goal and leads to economic losses due to various internal and external uncertainties in the financial activities of multinational companies.
Third, the internal problems of risk management of multinational companies in China
According to statistics, 50% of enterprise risks come from all levels of management, 30% from employees and only 20% from outside. Therefore, the analysis of enterprise risk management must start with the internal problems of enterprise risk management. Different from the microenvironment risk (enterprise variable risk) of multinational companies in China, the internal problem of risk management should be the core factor of microenvironment-enterprise variable, which is also related to Inter (Internal Control Integration Framework) and enterprise risk management framework.
The internal problems of management integration framework are closely related to the core factor-"internal environment".
Following COSO's report on Internal Control-Overall Framework, the American Committee of Sponsoring Organizations published 1992 "Enterprise Risk Management-Overall Framework" in September 2004. Compared with ICIF, ERM is an extension of ICIF to some extent, which means that risk management in modern enterprise management is closely related to internal control. There are two views on the relationship between risk management and internal control in academic circles: the first view holds that risk management is included in internal control because ICIF regards risk assessment as an integral element of enterprise internal control; The second view is that internal control is a part of risk management, because ERM is developed on the basis of ICIF, and it is clearly pointed out in the framework that risk management includes internal control. In view of the special relationship between risk management and internal control, Chinese scholars have not yet logically unified "internal control" and "risk management" and applied them to multinational corporations, a special enterprise organization. Therefore, ERM framework and internal control framework can be logically unified, and then the internal problems of risk management of multinational companies in China can be analyzed.
From the ERM framework of COSO, enterprise risk management includes eight interrelated components: internal environment, goal setting, event identification, risk assessment, risk response, control activities, information and communication and monitoring. Because "internal environment" affects the formulation of enterprise risk management strategy and objectives, risk identification and control activities, information and communication systems and the design and operation of monitoring measures, according to the ERM framework, it can be determined that "internal environment" is the core factor of enterprise risk management and the basis of all other components; According to the time sequence of the internal control framework issued by authoritative organizations at home and abroad, in the Accounting Standards Announcement No.55 (SAS No.55) issued by American Institute of Certified Accountants 1988, it is proposed that the internal control structure consists of three parts: control environment, accounting system and control procedure. The announcement formally brought the control environment into the category of internal control for the first time, which highlighted the importance of environmental control. The Internal Control-Overall Framework (ICIF) published by COSO in the United States in 1992 occupies a very important position in the development history of internal control theory. The internal control system proposed by ICIF consists of five parts: control environment, risk assessment, control activities, information, communication and supervision. In 2007, China's Enterprise Internal Control Standards Committee issued "Enterprise Internal Control Standards-Basic Standards", pointing out that internal environment is the general name of various internal factors that affect and restrict the establishment and implementation of enterprise internal control, and it is the basis for implementing internal control. American Sasno, 55 and ICIF always put "control environment" in the first place, which shows that they are in the core position in the whole internal control; According to China's basic norms, we can see that the "control environment" emphasized in internal control mainly refers to the control of the internal environment of enterprises, emphasizing internal environmental problems, which is essentially consistent with the "internal environment is the core of enterprise risk management" emphasized in ERM framework. Therefore, to analyze the internal problems of risk management of multinational corporations in China, we should start with the content elements of "internal environment" of multinational corporations in China. ERM framework, Sasno, 55, ICIF and basic norms have different ideas about the content elements of internal environment, but they are basically in the same strain. To sum up, the content elements of the internal environment mainly include corporate culture, governance structure, internal supervision and management methods. These four unfavorable factors constitute the main reasons for the internal problems of risk management:
(A) From the perspective of corporate culture: China's multinational companies lack scientific and unified risk management values.
On the one hand, risk management concept is the core element of risk management values, while the risk management concept of managers and employees of multinational companies in China is unscientific. COSO report has clearly pointed out that everyone in the enterprise is responsible for enterprise risk management. However, the managers of most multinational companies in China are backward in risk management concepts, which leads to their actions often overriding the risk management rules, and even some managers still have moral hazard problems. The employees of these multinational companies only rely on the sense of leadership in their work, and they also selectively abide by the standards and systems of risk management. On the other hand, the multinational companies in China lack unified risk management values. In recent years, the risk management awareness of multinational companies in China has been enhanced, but there is still a lack of unified risk management values to enhance risk management awareness. This is mainly reflected in the inconsistency of risk management values of multinational companies' parent and subsidiary companies in China. The managers of the parent company often think that the risk management of the whole multinational company is the unification of various systems and regulations of subsidiaries and the summary of information and data in all aspects, ignoring the research on the business risk of subsidiaries and its correlation with the overall risk of multinational companies; At the same time, the managers of subsidiaries only think that they can follow the rules and regulations of the parent company, ignoring the interactive risk management with the parent company. This non-uniform and non-interactive risk management leads to the overall risk management ability of multinational companies falling below its due level for a long time. This, in turn, will deepen the doubts of subsidiaries about the risk management ability of the parent company, thus forming a vicious circle.
(B) From the perspective of corporate governance structure, the corporate governance structure of multinational companies in China is not standardized.
The construction and effective operation of enterprise risk management depends on a good corporate governance structure. However, although multinational corporations in China have formally established corporate governance structure, which has the form of modern enterprises, they are far from achieving the effect of mutual checks and balances of internal power, which is the fundamental reason why the behavior of the "top leaders" of enterprises is above the risk management system. The most prominent problems are: the shareholders' meeting is a mere formality, the role of the board of directors is seriously weakened, and the power of the board of supervisors is empty.
First of all, the biggest feature of most multinational companies in China in the historical development process is that most of them have been transformed from state-owned enterprises into shares and groups, and the government has played a very important role in the formation of companies. The equity is too concentrated, the state-owned shares are "dominant", and the shareholders' meeting is a mere formality. This makes the risk management design and implementation basis of state-owned multinational companies with the largest proportion of multinational companies in China unclear, which can not fully represent the interests of all property owners, resulting in the final absence of the eighth international economic cooperation in 2009 and the serious phenomenon of "insider control". Secondly, the shareholders' meeting (SASAC) and the board of directors of state-owned multinational companies in China have a high position in the company law, but in fact, the recommendation and appointment rights of senior managers are exercised by the personnel department of the superior organization, which makes it difficult for the board of directors to supervise the managers. The shareholders' meeting and the board of directors are unresolved in the corporate governance structure, and their status is reduced. At best, they only have part of the decision-making value of specific business matters and the formal value of dealing with external supervision. This makes the management of the company under the direct intervention of some government officials for a long time, and it is impossible for the board of directors to legally prevent the improper intervention of the government. Therefore, external administrative risks cannot be prevented under the framework of this board of directors. Judging from the causes of risks, this power defect is the main cause of various risk events of state-owned multinational companies in China. Third, the role of the board of supervisors of multinational companies in China has been seriously weakened. The Company Law of 2006 stipulates that the board of directors is responsible to the shareholders' meeting, but the Company Law only stipulates the functions and powers of the board of supervisors, but it is not clear who is responsible and the status of the board of supervisors is not clear. In practice, due to the strong dependence of supervisors on the board of directors and the lack of supervision means, their main duties are limited to after-the-fact inspection, and they basically do not have the function of real-time monitoring. The phenomenon of "the board of supervisors does not supervise" is everywhere. (C) From the perspective of internal supervision: the internal audit of multinational companies in China is not in place.
The risk management process must be properly supervised. Under normal circumstances, the special supervision function of enterprises is completed by internal audit, which is the main content of internal supervision of risk management, and its role directly affects the effect of risk management. However, the internal audit of multinational companies in China is mostly established to meet the needs of national audit. The state implements a dual leadership system for the company's internal audit institutions, which is directly led by the principal responsible person of the enterprise in administration and guided by the state audit institutions in business. Because the establishment of this audit system has obvious external government pressure tendency, it will lead to the following problems: the internal audit mode of the board of supervisors is inefficient, the internal audit is limited to the financial function, and the internal auditors lack professional knowledge of risk management.
First of all, China's multinational companies generally adopt the internal audit mode centered on the board of supervisors. The board of supervisors often only has the right to supervise and make suggestions, but has no direct sanctions against directors and managers. It can only be implemented through the shareholders' meeting, which objectively weakens the supervision efficiency. Empirical research shows that the internal audit mode led by the board of supervisors is the largest, but the company performance is the worst. Secondly, the internal audit of multinational companies in China is only a functional department in the financial field, focusing on checking the authenticity of financial data such as accounting statements, rarely touching other areas of operation and management, and failing to give full play to the overall analysis, evaluation and suggestions of risk management by the risk-oriented internal audit of fortune 500 enterprises. According to the survey, at this stage, 18.29% of China enterprises' internal audit institutions do not play any role in risk management; Thirdly, the risk-oriented internal audit carried out by the world's top 500 enterprises has high requirements for specific implementers, requiring them to be proficient in conventional audit procedures and have professional knowledge and experience in risk management. At present, most of the internal auditors of multinational companies in China are accountants, who rarely receive professional training in risk-oriented internal audit and lack relevant knowledge and experience, so it is difficult to give full play to the important role of internal audit in risk management.
(D) In terms of management methods, the risk management methods of multinational companies in China are relatively backward.
According to ERM, all aspects of enterprise risk management need certain methods to support it. First of all, multinational corporations are a multi-branch organization system, and the information between parent companies and subsidiaries is often asymmetric, which may lead to incomplete information, false information and delayed information provision by subsidiaries. The authenticity and timeliness of information directly affect the accuracy and timeliness of risk management. Due to the lag in the construction of risk management information systems of most multinational companies in China, effective risk management information sharing and exchange cannot be formed between their parent companies and subsidiaries, and even some subsidiaries' subordinate departments have no corresponding channels to report to their parent companies even if they find risks. Secondly, compared with advanced measurement methods such as mathematical statistics model adopted by multinational companies in developed countries, most multinational companies in China still adopt relatively backward methods such as qualitative analysis for risk management due to various practical reasons such as incomplete risk management information. This directly leads to the inability of multinational companies in China to accurately predict, identify and evaluate risks, and further affects the smooth realization of risk management objectives of multinational companies in China.
Four. Countermeasures for Internal Problems in Risk Management of Multinational Corporations in China
(A) to cultivate a corporate culture environment for risk management.
In essence, enterprise risk management is to cultivate a unified mode of cognition and behavior under a cultural background. Therefore, multinational companies in China should regard risk management as an important part of corporate culture and run through the whole process of corporate culture construction, so as to cultivate and strengthen the scientific and unified risk management values of management and ordinary employees and consciously implement various norms and systems of risk management in their daily work; Through the cultivation of enterprise risk management culture, risk management will naturally penetrate into all business units, posts and work links of parent companies, subsidiaries and multinational companies, so that each post and everyone should consider upstream and downstream risks and their related factors when carrying out each business, thus forming an interactive risk management to prevent risks. In terms of creating a cultural environment for enterprise risk management, multinational companies in China can rely on written codes of conduct and rules and regulations to regulate employees' behavior, organize risk management training for all employees, and organize internal risk management assessments including ordinary employees within the enterprise to form an open cultural environment for risk management, so as to find more hidden dangers.
(2) Improve the corporate governance structure.
The research shows that only by establishing a power generation operation mechanism based on a scientific and modern governance structure can we straighten out various power structures within enterprises and enhance their risk management capabilities. First of all, in the construction of the shareholders' meeting, in order to make the shareholders' meeting truly represent the interests of all shareholders, it is necessary to improve the collection method and classified voting system of stock voting rights, and ensure the minority shareholders to exercise their rights at the shareholders' meeting through certain practical measures. Secondly, in the construction of the board of directors, the first thing is to improve the independent director system, give full play to its supervisory role in decision-making and management, so that the income of independent directors is not directly related to the enterprises in which they work, prevent the alienation of independent directors' roles, and finally prevent major shareholders from manipulating the board of directors. The second is to set up a special committee-risk management committee within the board of directors, so that the board of directors can realize the enterprise's risk management strategy through the guidance and promotion of the risk management committee. Thirdly, in view of the unresolved issues in the corporate governance structure of the shareholders' meeting and the board of directors of state-owned multinational corporations in China, under the premise that the existing organizational personnel management system will not change significantly, state-owned multinational corporations should use the principle of power integration and checks and balances to "set" the government organizational personnel department and SASAC as two different "shareholders" in the corporate governance structure. The personnel department of the organization enjoys some rights of the "shareholders' meeting" based on personnel rights, including the indirect appointment rights of the chairman (concurrently secretary of the Party Committee) and the director of the qualification examination committee for senior management of the board of directors (concurrently deputy secretary in charge of organizational work) (according to the provisions of the Company Law, the appointment of directors should be made through SAAC because SAAC is the sole shareholder in law); based on the right to operate assets, SAAC enjoys some rights of personnel appointment and dismissal, including the appointment of managing directors and managing deputy general managers. In this way, the balance effect of power can be produced at the board level, and the problem of cadre management right in the actual governance process can not be avoided. Finally, in the construction of the board of supervisors, we must ensure the integrity of the responsibilities and rights of the board of supervisors, and stipulate the staffing and funding sources of the board of supervisors to perform their duties from relevant laws and regulations to ensure the implementation of the responsibilities and rights of the board of supervisors. At the same time, strengthen the powers and responsibilities of the board of supervisors, refine the responsibilities of the board of supervisors through relevant implementation rules or regulations and methods, clarify the legal responsibilities of the board of supervisors, and truly implement risk control. If we can establish a risk management system under the leadership of the board of supervisors, we can also greatly reduce the risk of enterprises through pre-intervention, in-process participation and post supervision.
(3) Strengthen internal audit.
In view of the fact that China's multinational companies are still in the stage of establishing risk management process, the main content of their internal supervision-internal audit has not really played a role in risk management. Therefore, at this stage, the internal audit of multinational companies in China should be positioned as consultants, coordinators and supervisors of enterprise risk management, and participate in risk management mainly through management consultation and suggestion, management coordination and management supervision. First of all, for the internal audit mode, due to the weak supervision of the board of supervisors, the internal audit led by the board of supervisors has functional defects. The audit mode can adjust the internal audit led by the board of supervisors to the internal audit led by the board of directors. Practice has proved that the internal audit led by the board of directors has high efficiency in finding problems and transmitting information in time, which is very important to improve the scientific decision-making and efficiency of risk management. Secondly, for the internal audit function, due to the changes in China's accounting standards, the financial information operation of modern enterprises will become more and more standardized. What business owners really care about is how to maximize enterprise value and how to effectively prevent risks. This requires that the focus of internal audit work must be extended from "checking mistakes and preventing malpractices" in the traditional financial field to all levels and aspects of enterprise economic management and business activities such as internal management, decision-making and benefit service, and the function of internal audit should also be extended from inspection and supervision to evaluation, consultation, suggestion and coordination. Finally, for the quality of internal auditors, the internal audit department should strive to establish an internal audit quality control system in accordance with the auditing standards of the International Association of Internal Certified Auditors, strengthen the awareness of audit risk management, and improve the professional quality of internal auditors. The choice of ways includes multi-disciplinary hiring of internal auditors, optimizing the knowledge structure of internal auditors, and paying attention to the cultivation and assessment of internal auditors' comprehensive abilities (auditing, risk management, etc.). ), strengthen the follow-up education and on-the-job training of internal auditors, and set up expert groups of related businesses to participate in internal audit when necessary.
Fourth, build an advanced and effective risk management system.
In order to reduce the information asymmetry of multinational companies in China, such as parent companies and subsidiaries, and achieve the purpose of preventing risks. First of all, from the direction of information flow, multinational companies in China should ensure the smooth flow of information from top to bottom and from bottom to top; Secondly, from the perspective of information communication channels, the information that needs to be communicated in the risk management information system must be transmitted through an effectively designed risk management organizational structure. Risk management departments at all levels are responsible for collecting and transmitting all kinds of risk information, and the highest risk management Committee of the whole multinational company, as a key role in the communication channel, should summarize and process these information; Finally, from the perspective of the effectiveness of the risk management system, a truly effective risk management system can not only accurately calculate the risk value, but also realize the combination of ex ante and ex post, track the evaded risks and predict the risks that are happening. Specifically, the parent company must establish an effective risk management system within the entire multinational company: first, establish a risk management information system covering the entire operation process of the multinational company, and realize the automatic conversion of enterprise operation business information to risk information through fixed business processes. The second is to establish a risk early warning analysis system covering all risk management processes of multinational companies, that is, to adopt modern risk management technology-model measurement and other risk management methods, quantify risk indicators, collect important information of risk early warning, and predict the possibility and size of various risks in enterprises.