We test whether Thai listed firms with higher levels of good governance policy adoption are less likely to violate listing rules and laws designed to protect shareholders. Our results suggest that firms on average implement, substantively as opposed to symbolically, recommended governance policies, as violations occur less frequently among firms with higher governance policy adoption scores. However, we also find evidence of symbolic governance among a small group of 'talk-only' firms that issue statements about governance while lagging in the adoption of policies related to shareholder rights and the board of directors.

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Keywords G3, G38, K42, cheap talk, corporate governance, fraud, violations
Persistent URL dx.doi.org/10.1111/j.1468-036X.2010.00545.x, hdl.handle.net/1765/21526
Journal European Financial Management
Ananchotikul, N, Kouwenberg, R.R.P, & Phunnarungsi, V. (2010). Do Firms Decouple Corporate Governance Policy and Practice?. European Financial Management, 16(5), 712–737. doi:10.1111/j.1468-036X.2010.00545.x