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

165 NTU Management Review Vol. 28 No. 3 Dec. 2018 Accordingly, we conclude that simply increasing the number of directors cannot alter the negative effect of CEO career horizon on the corporate misconduct problem. In regards to the board’s functional diversity, which is traditionally treated as a means to access external resources (Hillman, Nicholson, and Shropshire, 2008), our finding adds merit to the role of a functionally diversified board in corporate misconduct prevention. Departing from previous knowledge on the importance of board governance (Zona, Minoja, and Coda, 2013; Mahadeo, Soobaroyen, Oogarah-Hanumana, 2011), our study demonstrates that a board equipped with diverse knowledge and experience becomes more relevant and effective in preventing corporate irresponsibility. Specifically, executives can use various types of corporate misconduct for their benefit. A board with diversified expertise and experience will become aware of corporate misconduct that is often hidden in many forms. Through an examination of board influence on the relationship between CEO career horizon and corporate misconduct, our study makes noticeable contributions to the agency theory and corporate governance. 5.2 Managerial Implications The findings of the present study have several managerial implications. First of all, given the nonlinear effects of CEO career horizon on corporate misconduct, company owners should be aware of the attitude and behavioral changes associated with the aging CEO. According to our findings and prior studies in China, CEOs or top executives are most likely to be accused of corporate misconduct in their early 50s. Such a finding does not universally suggest all firms to avoid hiring CEOs in their 50s because the executives at this age are still ambitious with their career and experienced in their professions. Some evidence shows that CEOs in this life stage have the most potential to promote the desired organizational behaviors and consequences, such as firm innovativeness (Cheng and Barker, 2014; Ryan and Wiggins, 2002). Corporate owners are thus suggested to find a balance by improving the board’s governance quality, as evidenced by our findings on the moderating effects of board governance. In other words, the likelihood of any irresponsible activity can be effectively mitigated through the portfolio and competence of a firm’s board of directors. Second, the findings for the two moderating effects suggest that the quality (i.e., functional diversity) is more important than the quantity (i.e., board size) of a board. The composition of a board, along with appropriate expertise and skills, is the key to serving the best interest of shareholders. In other words, if firms are managed by CEOs who have