Examine how different board characteristics affect the occurrence of corporate scandals.

Internal governance mechanisms including board of directors, board sub-committees, board of supervisors play an important role in mitigating the principal–agent conflicts (Hu et al., 2010). Previous corporate board studies have paid attention to the efficacy of boards of directors in fulfilling their monitoring and advisory roles and their influence on corporate governance. For instance, Uzun et al. (2004) find that board composition and the structure of a board’s oversight committees are significantly correlated with the incidence of corporate scandals. Xiang and Zhu (2020) highlight the important role played by academic independent directors on improving financial reporting quality. In addition, CEOs and other board members of firms committing scandals often receive lower compensation (Conyon & He, 2016).

Required: Examine how different board characteristics affect the occurrence of corporate scandals. You should make reference to the paper by Uzun et al. (2004).