Board Composition and Corporate Fraud

Abstract:     
The study reported here examined how various characteristics of the board of directors and other governance features affected the occurrence of U.S. corporate fraud in the 1978-2001 period. The findings suggest that board composition and the structure of a board's oversight committees are significantly correlated with the incidence of corporate fraud. In the sample, as the number of independent outside directors increased on a board and in the board's audit and compensation committees, the likelihood of corporate wrongdoing decreased.

Keywords: Corporate Governance, Advocacy, Regulatory, and Legislative Issues, Regulatory and Legislative Activities

Accepted Paper Series