Board Structure and Directors' Role in Preventing Corporate Misconduct in the Construction Industry

Chia Jung Lee, Ran Wang, Cheng Yu Lee, Cathy C.W. Hung, Shu-Chien Hsu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

4 Citations (Scopus)

Abstract

The control of corporate misconduct has become one of the most significant challenges facing society today. Every year hundreds of firms are prosecuted for illegal behavior. Although there is growing interest in corporate governance, there is minimal research on how it influences corporate misconduct. This study draws on organization economics and the strategic management literature to empirically investigate the relationship between board characteristics and firm misconduct. Using panel data on 45 publicly listed Taiwan construction companies between 2005 and 2014, the regression analysis revealed four findings of particular interest. First, multiple directorships have a U-shaped effect on illegal corporate acts. Second, experience diversity has a significant role in preventing corporate misconduct. Third, the impact of education diversity is positive and significant on firms' illegal behaviors, implying that similar education background for directors could benefit corporate misconduct prevention. Finally, directors' education level only has a limited effect, which may be explained by the characteristics of the construction industry.
Original languageEnglish
Article number04017067
JournalJournal of Management in Engineering
Volume34
Issue number2
DOIs
Publication statusPublished - 1 Mar 2018

Keywords

  • Board composition
  • Corporate governance
  • Corporate misconduct
  • Corporate social responsibility

ASJC Scopus subject areas

  • Industrial relations
  • Engineering(all)
  • Strategy and Management
  • Management Science and Operations Research

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