*2.4. Experience and TADV*

One of the most usual attributes of executives in the risk-taking literature is their experience (May 1995; Hoskisson et al. 2017), as experienced managers are reluctant to make changes and consequently take fewer risks (Hambrick and Fukutomi 1991; Miller and Shamsie 2001). Thus, experienced managers are more risk-averse and violate laws less. They have life and business experiences and perhaps past violation consequences such as prior penalties, which make them not to violate laws. The more experience managers have, the more business problems and more solutions they have had to deal with. Accordingly, the third proposition (P3) can be posited as follows:

P3: More entrepreneurial experience will reduce the likelihood of TADV.

The experience dimension could be measured as the combination of tenure (the board's inside experience) and business ties (the board's outside experience). Board tenure is the time spent on the board of a specific firm and it is expected to increase the director's knowledge of the firm and its business environment (Vafeas 2003) as well as commitment towards the company (Buchanan 1974). The tenure of directors on the same board captures the knowledge of the company's strategy and functioning (Harris and Shimizu 2004). As the boards of SMEs have fewer members, each board member should be fairly well informed on all aspects of the firm. Longer serving CEOs have greater temporal depth, as greater exposure to various events in the past helps to design more effective decisions impacting future outcomes (Ortiz-de-Mandojana et al. 2018). Related to the timely information disclosure violation, a longer board tenure could reduce the occurrence of it, because the longer CEOs have been in the firm, the more experienced they can be on the consequences of a law violation. Concerning other legal requirements, Baatwah et al. (2015) found that longer-tenured CEOs are linked with a timelier completion of the audit report. Similarly, Schrand and Zechman (2012) posit that managers of misreporting and fraudulent firms generally have shorter tenures. Thus, the first hypothesis (H3a) for the experience proposition states as follows:

**Hypothesis 3a.** *Board tenure will reduce the likelihood of TADV.*

Another proxy of managers' experience is multiple directorships or ties, a corporate governance variable that measures whether board members hold director positions in several firms at the same time. Managers with multiple directorships may be perceived positively since they facilitate the exchange of vital information for firms (Connelly and Slyke 2012) and because they are more likely to understand the business environment of the company (Hillman et al. 2007). Additionally, working in several firms may be conditioned by board members having uncommon skills and strong abilities in both monitoring and advising subordinates (Falato et al. 2014). In addition, the past penalties because of violating the law the board members with many ties have experienced in other firms could also reduce the risk of a new law violation. Thus, relying on the afore-given motivation, we posit the following hypothesis (H3b) for the proposition about experience:

**Hypothesis 3b.** *Multiple directorships will reduce the likelihood of TADV.*

## *2.5. Board Size and TADV*

Finally, as one of the main characteristics frequently used in the literature of corporate governance from large and/or listed firms is board size (Huse 2000), we assume that it is also relevant in SMEs, although less than in large and/or listed firms. Normally, the board size of SMEs is small, but still, there could be difficulties or conflicts in what information disclosure policy the company should have due to opposite opinions. According to the literature of public firms, the presence of a large number of directors implies a reduction of the board's effectiveness in management control (Yermack 1996; Eisenberg et al. 1998; De Andres et al. 2005; Cheng 2008) and an effective board can also be engaged in better disclosure practices (Willekens et al. 2005).

From another angle, a larger board will bring together a greater depth of intellectual knowledge, and therefore, could improve the quality of strategic decisions. An additional director could bring more human capital to the company, therefore increasing the board's information and specific knowledge about the business and its environment. The latter will increase the firm's efficiency (Adams and Ferreira 2007; De Andres and Vallelado 2008; Linck et al. 2008); and as mentioned before, efficiency in boards conditions its disclosure practices. Consequently, there could be a link between board size and information disclosure, while there are contradictory explanations with respect to whether it will increase or decrease the likelihood of TADV. Thus, we include board size in the analysis as a control variable to shed light on the controversy about its role in association with TADV.
