“Gatekeepers”, “Enablers”, or “Technicians”? The Corporate Governance Implications of Lawyer Executive Directors in Offshore Economies

The importance associated with lawyers as directors has largely been overlooked and is understudied in the literature. The few studies there are largely restricted to considering lawyers as nonexecutive directors and typically adopt a singular deterministic institutional approach. We depart from these prior studies in adopting a theoretical model which integrates the resource-based view with its institutional counterpart and in focusing on lawyers as executive directors with operational and strategic decision making capacity. The focus of our study is on the legally dynamic and innovative offshore jurisdictional frameworks of the Caribbean which hosts the largest concentration of the biggest offshore financial centers in the world. Our findings reveal that higher proportions of lawyer-executive directors are associated with increased firm transparency in financial reporting. This is further positively moderated when jurisdictions have higher financial secrecy and seemingly paradoxically higher institutional quality. Our results yield important implications for offshore finance and associated corporate governance