Corporate governance and management misconduct in Thailand

The primary objective of this thesis is to provide additional empirical evidence on the effectiveness of corporate governance in limiting agency conflict, with a specific focus on those corporate governance mechanisms associated with mitigating management misconduct. The focus of this study is a sample of companies listed on the Stock Exchange of Thailand (SET) that have experienced incidences of management misconduct such as management perpetrated fraud, insider trading and financial disclosure manipulation. As an emerging economy, Thailand represents an ideal environment to empirically test whether corporate governance recommendations developed for Western economies are relevant for developing economies such as those of South East Asia. This study finds no evidence supporting the effectiveness of major internationally recommended corporate governance mechanisms such as board independence, audit committee effectiveness and separation of the role of CEO and board Chair in limiting management misconduct. However, this study does find a significant positive relationship between the proportion of independent directors with greater levels of experience and knowledge, the presence of institutional ownership and concentrated controlling ownership and a reduction in the likelihood of a firm experiencing management misconduct. In addition to its contribution to the corporate governance literature, this study provides the regulators and company stakeholders with evidence to call for improvements in corporate governance practices designed to limit management misconduct in Thailand. These findings also suggest that regulators must consider external and internal factors inherent in emerging economies before adopting Western corporate governance practices.