Board Directors’ Expertise and Corporate Corruption Disclosure: The Moderating Role of Political Connections

Round 1

Reviewer 1 Report

I quote from the abstract. "The results of a rigorous multiple regression indicate that accounting experts, legal experts, political experts, and corporate media visibility each have a positive and significant influence on CCD. Moreover, the moderating role of legal experts is negative and significant due to their higher  political connections." This says that 'legal experts' are both positive and negative at the same time, which seems to make no sense. 

The key claim (page 2 line 87) is that "we believe that board expertise can curb corporate corruption and promote corporate corruption disclosure (CCD).". But a key issue for me is that the proxies used in the research ONLY monitor CC Disclosure, and do not investigate CC itself. Page 9 line 385 states it clearly: "Self-driven keywords were searched for in the annual reports to accumulate total CCD". So the 'measure' is the presence of particular words. It follows, to make up an example, that 'there is no reason to suspect money-laundering', and '20 cases of money-laundering were discovered by the auditors', BOTH give identical scores, as the key word (from line 385) appears in both. A strict reading of the paper reveals this clearly; there is full transparency in the descriptions given. But is it really much use??? Surely the world needs to know about corruption, its discovery, and moves towards its eradication? 

I am not a statistician, and the fact that I generally find little of concern regarding the results of H1 to H5 is perhaps a sign of my own weaknesses, as much as of the author strengths. Surely 'H4' on line 572 should read 'H5' ??? 

But I return to H4, and the oddly opposite statements I quote above from. the abstract. Line 537: "The research findings show a negative and significant relationship among the POTE, LEGE, and CCD ( ), which was as we expected and which supports H4.". Note that 'POTE' should read 'POLTE'. So political connections destroy legal expertise. Why not also .accounting expertise, etc.??? Given that Bangladesh is universally agreed to be highly corrupt, and that political connections are everywhere, this is central and fundamental. In such a context, does the simplistic word-count disclosure measure used have any real importance?? Is this not THE central issue??    

Line 642: "Therefore, management should consider the implications of having higher political connections, as this negatively influences their motivation and mechanism for fighting corruption and bribery, and increasing transparency and accountability". In theory, well said. But since by definition in the average case management ITSELF IS CORRUPT, this is unrealistic nonsense. Hard, brutal, reality needs to be faced, and in that sense I think the paper needs to be more analytical and critical. Disclosure, through keywords counted out of context, is actually easy. But what next? The paper cannot solve. But it can point and suggest considerably more forcibly. 

Author Response

RESPONSE TO REVIEWER 1:

Thank you dear respected reviewer for the valuable comments and suggestions that have improved our paper greatly. According to your suggestions, we have made the following revisions and included explanations:

 I quote from the abstract. "The results of a rigorous multiple regression indicate that accounting experts, legal experts, political experts, and corporate media visibility each have a positive and significant influence on CCD. Moreover, the moderating role of legal experts is negative and significant due to their higher political connections." This says that 'legal experts' are both positive and negative at the same time, which seems to make no sense.

 Responses:

Moderating effects indicate the condition that defines the relationship between independent (legal experts) and dependent (CCD) variables. Legal expert can have a positive effect on CCD as a stand-alone variable, while the positive effect can be moderated (weakened in our case) by the third variable (political experts in our study). We are not arguing legal experts have negative impact on CCD. Instead, the role of legal experts as a stand-alone variable is positive, but the positive role is reduced (i.e. moderated) by the political experts.

Our previous statement was misleading. Thus, we revised the related statement in the abstract and the interpretation of empirical results as follows (marked in red):

In [abstract]:

This study investigates the relationship between the presence of external experts on a board and CCD, as well as the moderating effect of political connection on the positive role of legal experts in CCD. The study combines the agency, resource dependence, and stakeholder theories to show how resourceful directors in the board promote corruption disclosure. Using data on listed firms in the Bangladeshi financial sector, the study analyzes 247 firm-year observations from 2012−2016. The results of a multiple regression analysis indicate that accounting experts, legal experts, political experts, and corporate media visibility each have a positive and significant influence on CCD. Moreover, the moderating effect of political experts on the relationship between legal experts and CCD is negative and significant due to their higher political connections. The study has significant implications for corporate governance and for policies concerning the development of the economy while reducing corruption (Line#5-17)

In [Results and Discussion]:

Our next variable is an interaction between POLTE and LEGE. A moderator is considered a third variable (Z) that changes the association between a predictor variable (X) and an outcome variable (Y) (Fairchild and McQuillin (2010).  According to the prior literature of statistics, the moderating effects can be positive, negative, ordinal and disordinal (Fairchild and McQuillin 2010). Moreover, a moderator may increase, decrease, or directionally change the relationship between the predictor and an outcome (Fairchild and McQuillin 2010; Baron and Kenny 1986; Bauer and Curran 2005). We tested the moderating role of POLTE on the relationship between LEGE on the CCD.  The findings show a negative and significant interaction variable (POLTE*LEGE) (), supporting H4. The result indicates that although LEGE positively promotes CCD when it is considered as a stand-alone variable (H2.), its positive role is compromised by the existence of political board members. In other words, having higher numbers of POLTE on the board reduces the positive role of LEGE control of corporate management because of a politically connected individual's power and personal benefits, and their party’s political agenda development (Uddin et al. 2016) (Line#560-572)

The key claim (page 2 line 87) is that "we believe that board expertise can curb corporate corruption and promote corporate corruption disclosure (CCD).” But a key issue for me is that the proxies used in the research ONLY monitor CC Disclosure, and do not investigate CC itself. Page 9 line 385 states it clearly: "Self-driven keywords were searched for in the annual reports to accumulate total CCD". So the 'measure' is the presence of particular words. It follows, to make up an example, that 'there is no reason to suspect money-laundering', and '20 cases of money-laundering were discovered by the auditors', BOTH give identical scores, as the key word (from line 385) appears in both. A strict reading of the paper reveals this clearly; there is full transparency in the descriptions given. But is it really much use??? Surely the world needs to know about corruption, its discovery, and moves towards its eradication?

Responses:

We also agree with you in this point that discloser can’t investigate corruption rather showing transparency. That is why more disclosure indicates management intention against control of corruption. Moreover, the disclosure practices in business management have been considered influential tools because of enhancing transparency and accountability. The content-based disclosure study prominently highlights the management intentions on the stakeholder's issues, which indicates disclosing more information assures different types of stakeholders, the commitment of the management. That is why contents or words related to corruption, bribery, and ethics in the annual report or sustainability report indicate management commitment, attitudes, and initiatives against corruption. Nowadays, world top companies follow different guidelines to disclose more information (like; GRI, ISO) as stakeholders are pressuring the company’s showing more transparency.

Changes in text:

In light of the above discussion and evidence, we believe that board expertise can increase corporate transparency and promote corporate corruption disclosure (CCD) (Line#89-90).

I am not a statistician, and the fact that I generally find little of concern regarding the results of H1 to H5 is perhaps a sign of my own weaknesses, as much as of the author strengths. Surely 'H4' on line 572 should read 'H5' ???

Responses:

Thank you very much, it is our mistake and we apologize for it. It is H5 and we corrected it. Line#593

But I return to H4, and the oddly opposite statements I quote above from. the abstract. Line 537: "The research findings show a negative and significant relationship among the POTE, LEGE, and CCD ( ), which was as we expected and which supports H4.". Note that 'POTE' should read 'POLTE'. So political connections destroy legal expertise. Why not also .accounting expertise, etc.??? Given that Bangladesh is universally agreed to be highly corrupt, and that political connections are everywhere, this is central and fundamental. In such a context, does the simplistic word-count disclosure measure used have any real importance?? Is this not THE central issue??    

Responses:

Thank you dear reviewer to correct the mistake. It would be POLTE we corrected it (line#540). Please refer to the response to the moderating role of POLTE (point 1).

We didn’t consider the moderating role of POLTE for the ACCTE is this study because, prior study has extensity discussed the role of ACCTE while the role of LEGE is very limited. Moreover, ACCTE experts are very common on the board because of professional financial literacy. On the other hand, the participation of LEGE is very limited. It is also noteworthy that the role of ACCT and LEGE is not the same while LEGE are more sound and proactive on the legal issues of corruptions and governance.

You are absolutely right, in Bangladesh, there are the higher political connection and higher corruption, therefore, extensive research is required in the management level as to how the higher connection affects the business and what the role of the management is. Disclosure practices in accounting and finance literature extensively try to find out organization policy and regulation regarding transparency and accountability. It is widely accepted that credible information disclosure enhances organization accountability and transparency. That’s why more information, contents or word regarding a specific issue informs organization policy and capability of how to manage the prevailing issues.

Line 642: "Therefore, management should consider the implications of having higher political connections, as this negatively influences their motivation and mechanism for fighting corruption and bribery, and increasing transparency and accountability". In theory, well said. But since by definition in the average case management ITSELF IS CORRUPT, this is unrealistic nonsense. Hard, brutal, reality needs to be faced, and in that sense I think the paper needs to be more analytical and critical. Disclosure, through keywords counted out of context, is actually easy. But what next? The paper cannot solve. But it can point and suggest considerably more forcibly

Responses:

Thank you for the suggestions and the constructive questions. We also agree with your statement that management itself is corrupt. Control of corruption is a war against evil. Corporate corruption is a concerning issues in the developing economy. Different rules, regulations, policy are working now to be more accountable to the business man. Global reporting initiative (GRI), ISO, UNGC rules, OECD principle against corruption and many other principles are effectively working in this issues. Transparency International is more visible around the world against corruption activities. The research focuses corporate level corruption disclosure practices from a most corrupted country to understand the role of business management.  In the sense of policy implications we are totally agreed with you but policy maker in the developing country like Bangladesh are also Business man and corrupted. Therefore, formulation of strict law and the implementation of law is very difficult in that environment unless stakeholders have any pressures.

To contribute more and to provide sound policy against corruption we have given more managerial implications along with literature review (line#132-137; 147-151; 664-671, and 674-683).

In [Discussion and conclusion]

Moreover, CCD like to work as a tool for increasing corporate transparency and reducing the legitimacy gap among the stakeholders. Disclosing corruption, bribery and ethical information improves better quality governance that forces politicians to be more accountable. CCD is a strategic approach of the corporation that indicates management capability to mitigate corruptions, bribes, and unethical transactions (544-548).

Moreover, the legal expert on the board is a contributing variable, particularly in the developing country’s corruption perspective. Additionally, the high political connection is a common phenomenon in the developing country’s business management, the study will enhance the political management literature in the control of corruption. The study will enhance the organizational behavior and ethics literature as the control of corruption enhance the transparency and accountability of the management. Last but not least we can say, the study has significant impacts on the theory of general discloser, as well as in the field of sustainability management literature. The study has significant managerial implications, especially regarding a developing country’s corporate governance and policy. ACCT and LEGE profoundly influence CCD practices, and this study makes a good case for including more accounting and legal experts on company boards. More professional and resourceful persons in the corporate board significantly improve the transparency and accountability of the corporation. The study found that more accounting and legal expert in the decision-making process improve information flow that helps the internal and external communication strength to mitigate stakeholders pressure. Moreover, the professional accounting expert and law expert can raise and solves many issues regarding financial and legal in relation to corruption, bribery, money laundering, taxation, and audit. Policymaker of the country considers the study to formulate a sound corporate governance regulation. Additionally, Securities and Exchange Commission and stock exchange listing authorities should make a mandatory provision of including legal expert, and accounting expert in the board while restricting the higher political connections of the business management (675-694).

References:

Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51, 1173–1182.

Bauer, D. J., & Curran, P. J. (2005). Probing interactions in fixed and multilevel regression: Inferential and graphical techniques. Multivariate Behavioral Research, 40, 373–400.

Fairchild & McQuillin (2010). Evaluating mediation and moderation effects in school psychology: A presentation of methods and review of current practice.

Jung, Herbohn & Claekson (2018). Carbon Risk, Carbon Risk Awareness and the Cost of Debt Financing. Journal of Business Ethics.

Author Response File: Author Response.pdf

Reviewer 2 Report

Although this is quite an interesting paper, it does suffer from some issues relating to expression, starting with the abstract. For example in the abstract please reword the sentence containing " external firm resources" as board directors cannot really be classified as external firm resources. In the introduction the sentence containing " ...five time champion.." needs revision.  The implication is that corruption is an issue in Bangladesh and this needs clarification in the sentence. 

There needs to be better convincing for considering board members under resource dependence theory. Figure 1 on page 7 needs to be revised. It's not very clear at all.

The problem is with H3 and H4 and the direction of relationship and moderation impact. You need to provide evidence that opposite directional impacts are possible with a moderating variable. Please provide evidence from statistical literature regarding this.

On page 9 you talk about fiver percent constraint words and power probability distribution: both need explanation.

The  model needs to be revised to show the negative moderation impact of POLTE.

Why does 2016 have a significant influence? Explain.

The results have not been discussed in light of the theories mentioned. This needs to be undertaken.

Author Response

RESPONSE TO REVIEWER 2:

Thank you dear respected reviewer for the valuable comments and suggestions that have improved our paper greatly. According to your suggestions, we have made the following revisions and included explanations:

Although this is quite an interesting paper, it does suffer from some issues relating to expression, starting with the abstract. For example in the abstract please reword the sentence containing " external firm resources" as board directors cannot really be classified as external firm resources. In the introduction the sentence containing " ...five time champion.." needs revision.  The implication is that corruption is an issue in Bangladesh and this needs clarification in the sentence. 

Responses:

Thank you, dear respected reviewer, for the valuable suggestions.

Our previous statement was misleading. Thus, we revised the related statement in the abstract and the interpretation of empirical results as follows (marked in red):

In [abstract]

This study investigates the relationship between the presence of external experts on a board and CCD, as well as the moderating effect of political connection on the positive role of legal experts in CCD. The study combines the agency, resource dependence, and stakeholder theories to show how resourceful directors in the board promote corruption disclosure. Using data on listed firms in the Bangladeshi financial sector, the study analyzes 247 firm-year observations from 2012−2016. The results of a multiple regression analysis indicate that accounting experts, legal experts, political experts, and corporate media visibility each have a positive and significant influence on CCD. Moreover, the moderating effect of political experts on the relationship between legal experts and CCD is negative and significant due to their higher political connections (5-17)

In [Introduction]

The question is especially significant in the context of Bangladesh because the country has a poor track record regarding corruption, based on Transparency International’s (TI) Corruption Perception Index (CPI). CPI reported that the country received highest corruption score (high score results means higher corruption and vice versa) on this system between 2001−2005, whereas in 2018, it ranked 143rd out of 180 countries (Line#39-40).

There needs to be better convincing for considering board members under resource dependence theory. Figure 1 on page 7 needs to be revised. It's not very clear at all.

Responses:

Dear reviewer thank you very much for addressing the issue especially, the mistake of the figure 1. We have included more literature in the theoretical discussion sections of RDT.

In [theoretical discussion]

Prior literature also suggested, resourceful persons are generally prominent and reputed in their areas, therefore they do not compromise any unethical and undocumented activities (Pfeffer and Salancik 1978; Pfeffer 1972). Based on the previous experiences and connections the expert director help to incorporate different types of policies and regulations to tackle corruption, bribery, undocumented transactions and unethical behavior of business management.  It is also considered that outside directors are the representative of the general stakeholders, therefore the presence of resourceful person reduces information asymmetry problem (132-138)

RDT also considers broad range of efficiency negotiator as they have strong network domestically and globally. Kassinis and Vafeas 2002 argues that strong negotiator to the government helps firms to minimize tax and tariffs as well as expanding business in the foreign market. For example, political experts’ sound relationship to the national government may enhance foreign market business negotiation (e.g.; international bidding and tender) as well as trust and confidence (148-152).

Thank you for the issue of the figure, we have missed showing the moderating variable name. We corrected the figure 1 (page#353-355).

The problem is with H3 and H4 and the direction of relationship and moderation impact. You need to provide evidence that opposite directional impacts are possible with a moderating variable. Please provide evidence from statistical literature regarding this.

Responses:

Thank you for the explanation of the moderating issues.  A moderator is considered a third variable (Z) that changes the association between a predictor variable (X) and an outcome variable (Y) (Fairchild and McQuillin (2010).  According to the prior literature of statistics, the moderating effects can be positive, negative, ordinal and disordinal (Fairchild and McQuillin 2010). Moreover, a moderator may increase, decrease, or directionally change the relationship between the predictor and an outcome (Fairchild and McQuillin 2010; Baron and Kenny 1986; Bauer and Curran 2005). We tested the moderating role of POLTE on the relationship between LEGE on the CCD.  The findings show a negative and significant interaction variable (POLTE*LEGE) (), supporting H4. The result indicates that although LEGE positively promotes CCD when it is considered as a stand-alone variable (H2.), its positive role is compromised by the existence of political board members. In other words, having higher numbers of POLTE on the board reduces the positive role of LEGE control of corporate management because of a politically connected individual's power and personal benefits, and their party’s political agenda development (Uddin et al. 2016). Line (560-570)

We have added a few references on the issue from statistical literatures supporting moderating effects.

Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51, 1173–1182.

Bauer, D. J., & Curran, P. J. (2005). Probing interactions in fixed and multilevel regression: Inferential and graphical techniques. Multivariate Behavioral Research, 40, 373–400.

Fairchild & McQuillin (2010). Evaluating mediation and moderation effects in school psychology: A presentation of methods and review of current practice.

On page 9 you talk about fiver percent constraint words and power probability distribution: both need explanation.

Responses:

We have added a little discussing because it defines the context of using the Keywords as the content analysis.

Recent studies on financial constraints, Bodnaruk et al. (2015), have consisted of at least five percent constraint words, which drive most of the keyword results in that analysis. They used 184 financial constraining keywords that are appearing in all annual reports. Lopatta et al. (2017) created a large set of anti-corruption keywords (200 in total), while Kim et al. (2018) derived five types of competitive action keywords (23 keywords in total) and Gamerschlag et al. (2011) developed 32 CSR keywords using different reporting sources to drive management disclosure levels. Moreover, the keyword finding technique from any dictionary often follows a power-law probability distribution (Bodnaruk et al. 2015). Additionally, the power law pattern of keywords calculation is commonly known as Zipf’s law (Bodnaruk et al. 2015) (410-418).

The model needs to be revised to show the negative moderation impact of POLTE

Responses:

Dear reviewer thank you so much for the suggestion. Our previous model was misleading by the moderation variable. In the model we have corrected it including the text.  We have revised the model in the figure as well as text (Line3353-355).

Why does 2016 have a significant influence? Explain.

Responses:

We have explained the possible reason of the dummy year 2016.

The Year dummy variable shows that, across the five years, only in 2016 is there a significant influence on CCD (, the possible reason may be an increase in pressures from the different stakeholders and regulators compared to prior years. The result supports the recent findings of Masud et al. 2017 and Masud et al. 2018, which evidenced that stakeholders (media, NGO, civil society and environmental activist group) are more active and concerned on these issues (environmental pollution, corruption, bribery) than the previous year, and disclosing CSR information is growing on (line#616-621)

The results have not been discussed in light of the theories mentioned. This needs to be undertaken.

Responses:

We have enlarged the managerial implications of the study according to the theory and literature.

In [theoretical discussion]

Prior literature also suggested, resourceful persons are generally prominent and reputed in their areas, therefore they do not compromise any unethical and undocumented activities (Pfeffer and Salancik 1978; Pfeffer 1972). Based on the previous experiences and connections the expert director help to incorporate different types of policies and regulations to tackle corruption, bribery, undocumented transactions and unethical behavior of business management.  It is also considered that outside directors are the representative of the general stakeholders, therefore the presence of resourceful person reduces information asymmetry problem (Line#132-138).

RDT also considers broad range of efficiency negotiator as they have strong network domestically and globally. Kassinis and Vafeas 2002 argues that strong negotiator to the government helps firms to minimize tax and tariffs as well as expanding business in the foreign market. For example, political experts’ sound relationship to the national government may enhance foreign market business negotiation (e.g.; international bidding and tender) as well as trust and confidence (148-152).

In [discussion and conclusion]

Moreover, CCD like to work as a tool for increasing corporate transparency and reducing the legitimacy gap among the stakeholders. Disclosing corruption, bribery and ethical information improves better quality governance that forces politicians to be more accountable. CCD is a strategic approach of the corporation that indicates management capability to mitigate corruptions, bribes, and unethical transactions (544-548).

Moreover, the legal expert on the board is a contributing variable, particularly in the developing country’s corruption perspective. Additionally, the high political connection is a common phenomenon in the developing country’s business management, the study will enhance the political management literature in the control of corruption. The study will enhance the organizational behavior and ethics literature as the control of corruption enhance the transparency and accountability of the management. Last but not least we can say, the study has significant impacts on the theory of general discloser, as well as in the field of sustainability management literature (Line#675-682).

More professional and resourceful persons in the corporate board significantly improve the transparency and accountability of the corporation. The study found that more accounting and legal expert in the decision-making process improve information flow that helps the internal and external communication strength to mitigate stakeholders pressure. Moreover, the professional accounting expert and law expert can raise and solves many issues regarding financial and legal in relation to corruption, bribery, money laundering, taxation, and audit. Policymaker of the country considers the study to formulate a sound corporate governance regulation. Additionally, Securities and Exchange Commission and stock exchange listing authorities should make a mandatory provision of including legal expert, and accounting expert in the board while restricting the higher political connections of the business management (Line#685-694).

Author Response File: Author Response.pdf

Reviewer 3 Report

 This study investigates the relationship between external experts presence as the board of directors and corporate corruption Disclosure in the financial sector in Bangladesh.  The study is novel in the context of Bangladesh and is an interesting read with a reasonable impact. 

 The title accurately reflects the content. This paper contains new information. The paper demonstrates an adequate understanding of the relevant literature in the field and cites an appropriate range of literature sources. 

Analysis and conclusions are supported by the data. 

 The conclusions adequately tie together the other elements of the paper. 

Only minor concerns I have with the paper are: 

Page 3, lines 94 to 96, the research question is not clearly framed. I will suggest rephrasing the wording for the more clear research question. Is it about why including experts or is it about how including experts? Is not clear research question and research are not giving the same direction. 

Section 1.1 background and hypothesis: Mention of multiple theories is confusing. The authors should have selected one or two particular theories and should have embedded it throughout the paper. 

The paper does have a very comprehensive literature review, which could probably be pruned in some respect to make the paper more manageable. Just for on example page 8, lines 376-378 uses about 15 references for one argument. 

The conceptual framework could be improved by showing the moderating role of legal experts in it. If this variable is significant enough to go in the title of the paper, it should also be included in the conceptual framework. Not sure what an upward pointing arrow is meant to show. 

In the introduction section, line 30, correct spellings of 'coampromises'.

Author Response

Response to Reviewer 3:

Thank you dear respected reviewer for the valuable comments and suggestions that have improved our paper greatly. According to your suggestions, we have made the following revisions and included explanations:

Page 3, lines 94 to 96, the research question is not clearly framed. I will suggest rephrasing the wording for the more clear research question. Is it about why including experts or is it about how including experts? Is not clear research question and research are not giving the same direction. 

Responses:

Thank you, dear respected reviewer, for the appreciation and the issue of the research question. According to your suggestions, we have rearranged the research question.

The dearth of corporate-level studies on this most critical issue makes us question how external experts (from accounting, law, and politics) of the country are promoting corporate corruption disclosure in the business management level (line#96-98)

Section 1.1 background and hypothesis: Mention of multiple theories is confusing. The authors should have selected one or two particular theories and should have embedded it throughout the paper.

Responses:

Thank you for raising the issue. Several theories are based on the general ground of the study. First, for the disclosure perspective, we have discussed stakeholder theory broadly only. On the other hand, board expertise and corporate governance perspective we have discussed RDT and agency theory. We have added some explanation on the RDT only

In [theoretical discussion]

Prior literature also suggested, resourceful persons are generally prominent and reputed in their areas, therefore they do not compromise any unethical and undocumented activities (Pfeffer and Salancik 1978; Pfeffer 1972). Based on the previous experiences and connections the expert director help to incorporate different types of policies and regulations to tackle corruption, bribery, undocumented transactions and unethical behavior of business management.  It is also considered that outside directors are the representative of the general stakeholders, therefore the presence of resourceful person reduces information asymmetry problem (Line#132-138).

RDT also considers broad range of efficiency negotiator as they have strong network domestically and globally. Kassinis and Vafeas 2002 argues that strong negotiator to the government helps firms to minimize tax and tariffs as well as expanding business in the foreign market. For example, political experts’ sound relationship to the national government may enhance foreign market business negotiation (e.g.; international bidding and tender) as well as trust and confidence (Line# 148-152). 

The paper does have a very comprehensive literature review, which could probably be pruned in some respect to make the paper more manageable. Just for on example page 8, lines 376-378 uses about 15 references for one argument. 

Responses:

Thank you for the issues, we also agree with you. We have used most references in these sentences because we have taken different keywords for the different prior studies. Keywords formation is a little bit complex work rendering us to go through prior different literature. Based on your suggestion we have deleted some of the references and reduced it into 10.

The most recent and influential research on corruption (anti-corruption) and bribe (anti-bribe) efforts, Lombardi et al. (2019); DeZoort and Harrison (2018); Saenz and Brown (2018); Islam et al. (2018); Cao et al. (2018); Islam et al. (2017); Lopatta et al. (2017); Joseph et al. (2016); Islam et al. (2015), and Chen et al. (2010) (line#394-397).

The conceptual framework could be improved by showing the moderating role of legal experts in it. If this variable is significant enough to go in the title of the paper, it should also be included in the conceptual framework. Not sure what an upward pointing arrow is meant to show. 

Response:

Dear reviewer thank you so much for the suggestion. Our previous model was misleading as to the moderation variable. We have revised the model and the figure as well as text (in red color).

In [abstract]:

This study investigates the relationship between the presence of external experts on a board and CCD, as well as the moderating effect of political connection on the positive role of legal experts in CCD. The study combines the agency, resource dependence, and stakeholder theories to show how resourceful directors in the board promote corruption disclosure. Using data on listed firms in the Bangladeshi financial sector, the study analyzes 247 firm-year observations from 2012−2016. The results of a multiple regression analysis indicate that accounting experts, legal experts, political experts, and corporate media visibility each have a positive and significant influence on CCD. Moreover, the moderating effect of political experts on the relationship between legal experts and CCD is negative and significant due to their higher political connections. The study has significant implications for corporate governance and for policies concerning the development of the economy while reducing corruption (Line#5-17).

In [Results and Discussion]:

Our next variable is an interaction between POLTE and LEGE. A moderator is considered a third variable (Z) that changes the association between a predictor variable (X) and an outcome variable (Y) (Fairchild and McQuillin (2010).  According to the prior literature of statistics, the moderating effects can be positive, negative, ordinal and disordinal (Fairchild and McQuillin 2010). Moreover, a moderator may increase, decrease, or directionally change the relationship between the predictor and an outcome (Fairchild and McQuillin 2010; Baron and Kenny 1986; Bauer and Curran 2005). We tested the moderating role of POLTE on the relationship between LEGE on the CCD.  The findings show a negative and significant interaction variable (POLTE*LEGE) (), supporting H4. The result indicates that although LEGE positively promotes CCD when it is considered as a stand-alone variable (H2.), its positive role is compromised by the existence of political board members. In other words, having higher numbers of POLTE on the board reduces the positive role of LEGE control of corporate management because of a politically connected individual's power and personal benefits, and their party’s political agenda development (Uddin et al. 2016) (Line#560-570)

We also corrected the figure 1 and title of the paper (353-355)

In the introduction section, line 30, correct spellings of 'coampromises'

Responses:

Thank you to check the spelling mistake. We are apologized and corrected it to that compromises (Line#31)

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

You have done a good job in dealing with the various points raised by myself, and, as far as I can tell, also by the other reviewers. I accept that you have gone as far as you reasonably can in dealing with my concerns, which indeed you obviously share, that increased disclosure will not, of itself, necessarily reduce corruption. But your argument that disclosure adds to the pressures regarding the reduction of corruption itself is indeed valid.

However your latest changes have NOT been adequately proof-read for English clarity or grammatical accuracy. This remains an essential task, and must be done properly and thoroughly, and if necessarily professionally.

Author Response

RESPONSE TO REVIEWER 1:

Thank you dear respected reviewer for the valuable comments and suggestions. According to your suggestions, we have made the following changes:

The submitted version was professionally proof read. 

We re-checked the additional English languages and grammatical errors, and thank you for the suggestions.

Author Response File: Author Response.pdf

Reviewer 2 Report

Thank you for undertaking the revision. I am afraid that the article still suffers from serious  methodological issues. The moderating variable ( which is basically political influence) needs to be renamed to express its negative impact on the relationship between professional ( legal and accounting expertise) board presence and corruption disclosure. 

The development of the corruption disclosure index has not been explained very clearly. Bias in the disclosures has not been accounted for. There are assumptions in this article which do not hold very well realistically: All accountants and legal experts only influence corporate behaviour one way: the right, ethical, legal way. Political connections of experts can negatively influence, that is increase  corrupt behaviours of firms. Further detail on how corrupt behaviours are objectively disclosed needed to be provided. 

Author Response

RESPONSE TO REVIEWER 2:

Thank you dear respected reviewer for the valuable comments and suggestions that have improved our paper greatly. According to your suggestions, we have made the following revisions and included explanations:

I am afraid that the article still suffers from serious methodological issues. The moderating variable (which is basically political influence) needs to be renamed to express its negative impact on the relationship between professional (legal and accounting expertise) board presence and corruption disclosure. 

Response:

Thank you dear reviewer of the concern. We also agree with on your concern about our approach. We’d like to say that political connections or influences have impacts on other expert directors. Based on your suggestions and for the more clarity to the reader we have changed the variable name into POLTC-political connections of the board instead of POLTE-political expert. In addition we provide some elaboration to the relationships between POLTE and LEGE in some places (all changes and additions are marked in blue in the revision 2).

The development of the corruption disclosure index has not been explained very clearly. Bias in the disclosures has not been accounted for. There are assumptions in this article which do not hold very well realistically: All accountants and legal experts only influence corporate behavior one way: the right, ethical, legal way. Political connections of experts can negatively influence, that is increase corrupt behaviors of firms. Further detail on how corrupt behaviors are objectively disclosed needed to be provided. 

Response:

Thank you dear reviewer. We have inserted a new section of content analysis to be clearer ideas of the content based keywords analysis. We also explained the corrupt behavior and disclosure (Line #377-400; 440-441; 690-698). The new additional section explaining the content analysis is provided as follows (#377-400):

Content Analysis

Content analysis is a common and widely accepted method in the disclosure practices while content analysis coded written text into several groups. It is the method of frequency indication on the basis of the subject matter’s, importance and availability (Gamerschlag et al. 2011; Abdolmohammadi 2005; Guthrie et al. 2004; Krippendorff 2004). The main objective of the content analysis is numerically collecting or gathering the main message for the selected text (Krippendorff 2004; Neuendorf 2002). Prior literature extensively used content analysis in the CSR, sustainability management or general disclosure studies because of its capacity to provide valid results to the extent of different items (e.g.: words, text, sentences, lines, pictures, messages) disclosure Deegan and Gordon 1996; Guthrie et al. 2004; Guthrie and Farneti 2008; Guthrie and Parker 1989). Previous content-based studies used different types of techniques of content formation such as sentences and words (Gray et al. 1996), words, tables, pictures, graphs and sentences (Ullah and Rahman 2015; Deegan and Gordon 1996; Guthrie et al. 2004; Guthrie et al. 2008), and keywords (Baral and Pokharel 2017; Lopatta et al. 2017; Bodnaruk et al. 2015; Gamerschlag et al. 2011). Moreover, most of the researchers followed general content of any items reported or not reported. Furthermore, mixed approach like general content and interview (Nurunnabi 2016, Mahmood et al. 2018) and general content and keywords (Guthrie et al. 2008) were also used in the disclosure studies. Prior literature also mentioned that keywords based content analysis the coder would be out of subjective judgment and the results would be most reliable because of repeated trials or searches (Gamerschlag et al. 2011). Additionally, prior researches also criticized the content-based studies because of the biases, frequent nature of contents and not reported the negative events (Boiral 2013; Deegan and Gordon 1996; Guthrie et al. 2004; Guthrie and Farneti 2008). Prior literature also mentioned that keywords based content analysis the coder would be out of subjective judgment and the results would be most reliable because of repeated trials or searches (Gamerschlag et al. 2011).

Author Response File: Author Response.pdf