Name
Media-Amplified Peer Enforcement and Board Co-option in Labor Law Compliance
Date & Time
Monday, July 6, 2026, 10:15 AM - 10:40 AM
Description

This study investigates whether and how board co-option affects a firm’s labor-related regulatory risk, specifically focusing on wage-related violations. Using Taiwanese listed firms from 2021–2024, a period of intensified enforcement and mandatory disclosure, we conceptualize wage violations as a salient form of nonfinancial regulatory risk revealed primarily through enforcement actions rather than financial statements. Our empirical evidence demonstrates that media-amplified peer labor law enforcement events impose conditional deterrence on management. Specifically, the interaction between board co-option and media salience is negatively and significantly associated with the probability of wage-related infractions. Further analysis reveals that this effect is absent for technical, non-wage violations, which are less reputationally damaging, and that co-opted directors do not respond to peer enforcement events per se in the absence of media coverage. These findings underscore the ‘‘conditional governance’’ role of co-opted boards, identifying media salience as the critical mechanism that activates director oversight in substantive, decentralized operational domains.

Session Chair
Dr Yue Cai, The Australian National University
Discussant
Dr Zeyu Yang, Shaanxi University of Science and Technology
Keywords
Labor Law Violations, Media Salience, Wage Compliance, Co-opted Boards, Conditional Deterrence, Nonfinancial Regulatory Risk
Theme
CORPORATE GOVERNANCE
Author 1
Yu-Lin Chen
Author 2
Mei-Chu Huang