Academic independent directors and corporate misconduct: Evidence from China

This study empirically investigates the effect of academic independent directors on corporate misconduct. Using data on China’s A-share listed companies from 2009 to 2023, we find that a higher proportion of academic independent directors is associated with a lower likelihood of corporate misconduct. This finding remains robust after a series of robustness checks. Mechanism analyses indicate that academic independent directors mitigate corporate misconduct by strengthening corporate social responsibility, enhancing internal control quality, and reducing inefficient investment. Heterogeneity analyses show that the negative impact of academic independent directors on corporate misconduct is most pronounced in privately owned firms, firms with higher information opacity, and larger firms. Further evidence suggests that only academic independent directors with research experience at top universities or leading research institutions are effective in curbing misconduct. Moreover, academic independent directors significantly reduce disclosure, accounting, and operational misconduct, but do not meaningfully mitigate leadership-related misconduct.