Board Directors’ Expertise and Corporate Corruption Disclosure: The Moderating Role of Political Connections

Abstract

Professional expert directors extensively influence corporate corruption disclosure (CCD), while higher political connections may exacerbate corporate management. This study investigates the relationship between the presence of external experts on a board and CCD, as well as the moderating effect of political connections, on the positive role of legal experts in CCD. The study combines agency, resource dependence and stakeholder theories to show how resourceful directors on the board can promote corruption disclosure. Using data on listed firms in the Bangladeshi financial sector, the study analyzes 247 firm-year observations from 2012 to 2016. The results of a multiple regression analysis indicate that accounting experts, legal experts, political connections and corporate media visibility each have a positive and significant influence on CCD. Moreover, the moderating effect of political connections on the relationship between legal experts and CCD is negative and significant due to their higher political influences. The study has significant implications for corporate governance and for policies concerning the development of the economy while reducing corruption.

Corporate governance and banks’ productivity: evidence from the banking industry in Bangladesh

“…Furthermore, the study of Kusnadi et al (2016) outlined the evidence from Singaporean firms that accounting specialists on the board encourage the quality of financial reporting substantially. They further confirmed these outcomes by considering both accounting and economic specialists and reporting the same outcomes, noting that accounting specialists act as a watchdog on the company's financial reporting system (Kusnadi et al 2016;Masud et al 2019). Accounting experts of a firm always concentrate on the profitability of a firm rather than the sustainability of that firm.…”

“…Having legal experts (LE) on the board allows companies to obtain adequate guidance, suggestions, recommendations, and guidance on financial and nonmonetary agreements with the third entities, how to handle legal problems within the institutions and how to grip accusations of corruption (Masud et al 2019). Lawyers are regarded to be extremely skilled, professional individuals whose legal background allows them to cope efficiently with delicate political, social, and environmental performance (De Villiers et al 2011).…”

“…Institutional share is the portion of ownership of the firm that is held by non-bank institutions which keep the diverse impact on investment decision, information production, and firm policies (Gillan and Starks 2000) Accounting experts are those on the board who play an accounting watchdog role by focusing on supervision, transparency and accountability of recording and reporting of financial data (Kassinis and Vafeas 2002;Masud et al 2019) Legal experts (LE) Law experts are expert board members with a law background, concentrate on legal guidance on financial and nonfinancial deeds with external, resolving legal issues (Masud et al 2019) Controlled factors Bank size (SIZE) The natural logarithm of bank assets is termed as bank size that ensures prospective scale economies (Laeven et al 2016) Age of Banks (AGE)…”

The Link between Board Structure, Audit, and Performance for Corporate Sustainability

“…In our research, we considered as explanatory variables important corporate governance attributes such as board structure (size, number of non-executive directors, CEO duality, gender diversity, namely women on board), audit (audit committee and external auditor's opinion), but also control variables such as Stock Market Value, Size and Leverage, related to firm characteristics. For the comparability of the results, the values of Stock Market Value and those expressing firm size were measured using a natural logarithm of the total assets, following Masud et al [56]. We also included in the analysis the industry and stock market fixed effects and random effects, in order to determine their influence on performance and to reduce the shock of unnoticed particularities of the industry or other macroeconomic factors.…”

Exploring Relationships between Environmental Performance, E-Government and Corruption: A Multivariate Perspective

“…On the other hand, corruption has become a global problem and compromises governance, transparency and accountability [18], becoming a very worrying problem in developing countries [19]. This is particularly with regard to environmental issues since these are extremely vulnerable to corruption [20][21][22], affecting environmental quality through different routes [23].…”