Corporate Governance Culture Transmission in Mutual Funds: Directors as Vector of Transmission

Abstract

The purpose of study is to investigate the unique dimension of corporate governance of mutual fund that how culture of good and bad governance transmits from corporate industry of Pakistan to Mutual funds? Independent directors who are working in other industries and same time are independent directors of mutual fund are transmitting good or bad corporate governance culture of other industries into the mutual fund industry as well. Furthermore, it is investigated that how females and foreign director on board of mutual fund effect the culture of corporate governance in the mutual funds. We have applied fixed effect panel regression and results revealed that independent directors transmit shareholder friendly culture into mutual fund industry in Pakistan that called expertise effect, whereas if dependent directors of fund are connected with outside industry it is not good for governance of mutual fund due to cronyism effect. Moreover, foreign and female directors on board are not helping in promoting a good culture of corporate governance in the Mutual fund industry.