Managing the Risks of Corporate Fraud: The Evidence from Hong Kong and Singapore

Seminar/Forum

Managing the Risks of Corporate Fraud: The Evidence from Hong Kong and Singapore

Since the Asian financial crisis of 1997, Hong Kong and Singapore have implemented reforms that promote independence and monitoring competency of the boards of directors of their listed companies. However, with the advent of the financial crisis of 2007/2008, a wave of fraud cases prompts the question as to the effectiveness of these reforms. In this seminar, Associate Professor Wan of Singapore Management University will report on the findings from an analysis of 62 listed companies that suggest that fraudulent companies tend to combine the roles of chairman and chief executive officer and have fewer non-accounting finance experts. Otherwise, there are no material differences in the other corporate governance characteristics. The reasons for the limited role of independent directors in preventing fraud are due to the low threat of enforcement actions and their incentives to side with controlling shareholders. Thus, the results suggest that the high expectations of independent directors are only partially fulfilled.

Presenter

  • Associate Professor Wai Yee Wan
    Associate Professor Wai Yee Wan, Singapore Management University