Top management team faultlines and corporate violations in China: the internal governance perspective

The relationship between Top management team (TMT) and corporate violations has long been a focus of both academic and practical attention. Using a sample of 4,671 listed companies from 2012 to 2024 in China, this paper examines the internal governance role of TMT faultlines in reducing corporate violations. The results show that TMT faultlines significantly impede corporate violations. In addition, corporate risk-taking level and managerial shareholding significantly moderate the relationship between TMT faultlines and corporate violations. High corporate risk-taking level further strengthens the moderating effect of managerial shareholding. This paper explores the internal governance role of TMT faultlines in controlling corporate violations and contributes to corporate governance literature by highlighting the importance of top management team configuration in reducing corporate violations.