Board Structure and Corporate Risk-Taking Behavior: An Empirical Analysis

This paper explores how the board structure is associated with corporate risk-taking behavior of Chinese listed firms with an accounting view. The analysis is based on panel data of listed companies in Shanghai and Shenzhen Stock Exchange between 2012 and 2023 to test how these important board characteristics influence company risk-taking, such as board size, board independence, CEO duality, and board interlocks. The results show that there is a negative relationship between corporate risk-taking and board size as well as board independence, which implies that more effective monitoring mechanisms encourage risk-averse decision-making. Conversely, risk-taking has a positive relationship with CEO duality and board interlocks, which is an indication of the effect of managerial power concentration and external network resources. Moreover, the quality of accounting information is identified to moderate these relationships to a considerable degree by curbing excessive risk-taking due to a decrease in information asymmetry and the increase in transparency. The findings confirm the agency theory and the resource dependence theory and the significance of combining the governance and accounting systems. The current research has the potential to add to the body of knowledge by presenting evidence in a setting of an emerging market and offering feasible implications in the area of enhancing corporate governance and financial reporting practices. Keywords: Board Structure; Corporate Risk-Taking; Accounting; Information Quality; Corporate Governance.