The Influence of Board Characteristics on Business Ethics of Companies Listed on the Stock Exchange of Thailand: ESG 100
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Abstract
The objective of this research was to examine the influence of board characteristics on business ethics of companies listed on the Stock Exchange of Thailand emphasizing on ESG 100. The representatives of board characteristics consisted of three variables as follows; board financial expertise, board gender diversity, and board independence. Earnings management measured by the model of Yoon & Miller was the proxy of business ethics. Besides, five control variables were board size, owner concentration, leverage, profitability, and company size. This study collected data from secondary source belonging to 269 firm-year observations. These data were available in their annual reports, financial statements, and annual registration statements (form 56-1) of the year 2015-2018 covering 4 years. The data were analysed by multiple regression analysis technique.
The result revealed that: there was significantly statistical negative influence of board independence on earnings management. This indicated that board independence could mitigate earnings management reflecting business ethics committed. Therefore, this could imply that board independence encouraged companies in ESG100 to commit with business ethics through faithful representation of financial reporting.
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