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ScholarOne - The backgrounds of members of boards of directors and corporate misconduct: Evidence from Japan
  • Taeyoung Yoo,
  • Seunghwan Ku
Taeyoung Yoo
Hankuk University of Foreign Studies

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Seunghwan Ku
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This study explores the backgrounds of members of boards of the directors to expand the literature on corporate misconduct, which has primarily drawn upon economic factors and governance structures. In particular, it examines the relative effects of directors from non-elite schools and directors with technical or legal backgrounds and sheds light on an organizational design that could restrain corporate misconduct. Based on panel data from 2007 to 2018 collected from Nikkei 225 indexed firms in Japan, the outcomes of population-average panel logit regression indicate that directors from non-elite schools decrease corporate misconduct, while directors with technical or legal backgrounds increase it. It is noteworthy that the effects on misconduct are especially significant when firms R&D investments are insufficient. This study suggests that firms should consider sociopolitical tensions on the board in order to design an appropriate board structure that reduces corporate misconduct.
04 Jan 2024Submitted to Advance
01 Apr 2024Published in Advance