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

155 NTU Management Review Vol. 28 No. 3 Dec. 2018 provides four categories of corporate misconduct information: (1) corporate misconduct in environmental protection and security 1 , (2) corporate misconduct in information disclosure 2 , (3) corporate misconduct in labor relationship 3 , and (4) other corporate misconduct outside the above three categories. Since companies may not adopt irresponsible behaviors to lower their costs or make additional short-term profits for one single reason, we thus follow Williams et al. (2005) to measure corporate misconduct by the total number of related events in which firms were found guilty or penalized in litigated cases in the focal year. 3.3 Independent Variables CEO career horizon was measured by a CEO’s age (Oh et al., 2016; McClelland et al., 2012); that is, as the age increases, the career horizon of a CEO decreases. The data was collected from “ The Manager Directory in Taiwan ” published by China Credit Information Service and other public resources. Regarding two moderators, Board size was measured as the total number of directors on the board in the focal year (Coles, Daniel, and Naveen, 2008). Data on board members were obtained from annual reports and the TEJ database. Board functional diversity was captured by functional heterogeneity of board members using Blau’s (1977) heterogeneity index. We followed the categorization of Hillman, Cannella, and Paetzold (2000) for the functional roles of directors—insiders, business experts, support specialists, and community influentials. This paper treats the inside directors who serve currently or have served in the past as active owner-agents of the firm. Business experts are directors who are active or retired executives in other for-profit organizations, and directors who serve on other large corporate boards. Support specialists include legal experts, finance specialists, as well as sales and marketing professionals. Community influentials include politicians, academics, or other community members in generally non-profit organizations. The higher value of this variable shows higher board functional diversity of a firm. 1 The company violated a statute of environmental protection, industrial safety, or public safety and was fined by the administration or exposed by media. 2 The company was fined by the administration for a non-disclosure or late disclosure of corporate information. 3 The company was involved in a labor dispute or violated labor rights and was fined by the administration or exposed by media.