The Impact of the Board Characteristics on the Relationship of Shareholder Structure and Earnings Management of Listed Companies in the Stock Exchange of Thailand
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Abstract
This research aims to 1) examine the impact of shareholder structure and board characteristics on the earnings management of firms listed on the Stock Exchange of Thailand and 2) study the influence of the proportion of independent directors and the separation of top executive positions on the relationship between shareholder structure and earnings management of firms listed on the Stock Exchange of Thailand. The study uses a quantitative research design based on secondary data from 447 firms, totaling 2,235 data points from companies listed on the Stock Exchange of Thailand between 2019 and 2023, covering five years of data from annual reports, financial statements (Form 56-1), and SETSMART. The statistical methods used in this research include 1) descriptive statistics such as minimum, maximum, mean, and standard deviation, and 2) inferential statistics, including Pearson correlation analysis and multiple regression analysis. Research findings reveal that: 1) the main impact of shareholder structure, precisely the proportion of institutional and foreign shareholders, negatively affects earnings management. This negative impact highlights the importance of creating policies that promote a shareholder structure supporting sustainable long-term growth. Additionally, the characteristics of the board of directors, particularly the absence of dual roles among top executives, negatively affect earnings management, indicating delays in responding to business challenges or opportunities. 2) Board characteristics do not influence the relationship between shareholder structure and earnings management, suggesting the need to improve the roles or responsibilities of independent directors within organizations. Earnings management depends on the strategies and business goals the management team sets, while independent directors do not directly influence internal earnings management. Furthermore, separating executive roles facilitates transparency in monitoring and decision-making but does not alter the relationship between shareholder structure and earnings management.
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