臺大管理論叢 NTU Management Review VOL.28 NO.3

Does CEO Career Horizon Lead to Corporate Misconduct? Evidence of Taiwanese Semiconductor Firms 154 misconduct, the effect of CEO career horizon on corporate misconduct should be inevitably confounded by the diversity of board members’ functional backgrounds. In this vein, the relationship between CEO career horizon and corporate misconduct can be neutralized when boards have higher levels of functional diversity. Specifically, the inverted U-shaped effect of CEO career horizon on the incidence of corporate misconduct becomes smaller in magnitude. H3. The inverted U-shaped relationship between CEO career horizon and corporate misconduct becomes weaker in firms, when their boards have higher levels of functional diversity. 3. Research Design 3.1 Sample The objective of this research is to examine the relationship between CEO career horizon and the occurrence of illegal corporate acts. To test the above hypotheses, we constructed a sample with a wide range of variance with respect to corporate irresponsibility issues. The population we used included all semiconductor companies publicly listed in the Taiwan Stock Exchange and the Over-the-Counter Securities Exchange. Such a sample ensures that all the companies observed met the same reporting standards required by the authorities and has periodically been audited by independent third parties. The consistency of these standards guarantees the reliability of the data. After removing some observations for which data were missing, 1,124 firm-year observations for 121 publicly listed Taiwanese semiconductor firms in the period of 2002~2013 were employed to test the hypotheses. 3.2 Dependent Variable Corporate misconduct . Prior studies indicate that firms engage in various misconduct activities to make company performance look better, such as accounting fraud, antitrust activities, patent infringement, environmental pollution, labor disputes and other actions that violate criminal laws (Baucus and Baucus, 1997; Williams et al., 2005). The data can be collected from the Corporate Social Responsibility (CSR) database provided by the Taiwan Economic Journal (TEJ), which systematically collects information from multiple sources. Specifically, the TEJ collects information on corporate misconduct from the Market Observation Post System (M.O.P.S.) of the Taiwan Stock Exchange Corporation, Economic Daily News, Commercial Times, and other public resources. The database