Directors’ Political Connections and Compliance with Board of Directors Regulations: The Case of S&P/Tsx 300 Companies

Hanen Khemakhem, Saidatou Dicko

Abstract


Further to the various scandals that shook North-American markets in the early 2000s, Canada reacted in 2004 and 2005 by changing its regulations on the governance practices of listed companies. Faccio (2006) and otherauthors have argued that politically connected companies can have less regulatory oversight than unconnected firms. This affirmation raises an issue that this article attempts to solve, i.e., whether politically connected Canadian companies are less compliant with regulatory requirements on governance than unconnected firms, and with board of directors requirements in particular. Although politically connected and unconnected firmsdiffer significantly in their compliance with regulation, the analyses show that the state of being politically connected tends to have little bearing on regulatory compliance.


Full Text: PDF DOI: 10.5539/ijbm.v8n24p117

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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