Two essays on military directors of Thai listed firms

Abstract

This dissertation studies the appointment of military directors by Thai-listed firms and its various corporate governance implications. There are three significant findings from the study. First, the military regime is associated with poor firm performance, and businesses with ties to the government generally dislike hiring military directors. They are less inclined to nominate a military director for their board, and those who have been appointed have seen the performance deteriorate. Moreover, when listed firms with government ties appoint military directors, the stock market reacts unfavorably. Nonetheless, military directors still have certain resource provision capacities, as businesses in a consolidated industry are more inclined to choose military directors to protect themselves from possible rivalry. Second, trustworthy internal governance systems that enhance business performance in Thailand include board independence and block holders, particularly when the focus firm is in a consolidated industry. Last but not least, even though the military director is generally perceived as unqualified to fill the monitoring position on the board, the appointment of the military director has less of an impact on the internal governance of the company because firms typically increase the size of their board to accommodate the military director, allowing them to obtain crucial resources without jeopardizing the effectiveness of the board.