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This study aims to provide new evidence linking internal corporate governance mechanisms and corporate misconduct, using a sample of 2,844 public US companies during the period 2007-2019. The results reveal that optimal size and diverse boards, including well-functioning audit com- mittees, are negatively related to corporate violations. In contrast, we show that board mem- bers’ independence, activity, and ownership are positively related to a rm’s fraudulent activities. Therefore, not all internal governance mechanisms are related to lower corporate misconduct. Moreover, we show that some internal governance mechanisms, such as the share of female board members, mitigate only certain types of corporate misconduct. The results show that attempts to regulate corporate governance mechanisms should be considered with caution as they do not always provide the expected outcome

Author

Listed:
  • Oskar Kowalewski

    (Institute of Economics, Polish Academy of Sciences, Warsaw, Poland IESEG School of Management, UMR 9221 - LEM - Lille Économie Management, Lille, France Univ. Lille, UMR 9221 - LEM - Lille Économie Management, Lille, France CNRS, UMR 9221 - LEM - Lille Économie Management, Lille, France)

  • Nicolas Eugster

    (The University of Queensland, Brisbane, Australia)

  • Piotr Spiewanowski

    (Institute of Economics, Polish Academy of Sciences, Warsaw, Poland)

Abstract

No abstract is available for this item.

Suggested Citation

  • Oskar Kowalewski & Nicolas Eugster & Piotr Spiewanowski, 2022. "This study aims to provide new evidence linking internal corporate governance mechanisms and corporate misconduct, using a sample of 2,844 public US companies during the period 2007-2019. The results reveal that optimal size and diverse boards, inclu," Working Papers 2022-ACF-05, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:f202205
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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