The Detection Effect of Foreign Monitors: Board Heterogeneity, Audit Committee Composition, and Disclosure Violations in Vietnam

This study investigates the transmission mechanism between board characteristics and corporate disclosure violations (CDVs) among Vietnamese listed firms from 2021 to 2024, utilizing Generalized Structural Equation Modeling (GSEM) integrated with Entropy Balancing to rigorously mitigate endogeneity and self-selection bias. The central finding establishes a full mediation mechanism of the Audit Committee (AC) in the relationship between board attributes and compliance, specifically identifying "the detection effect of foreign monitors". We find that foreign directors act as strategic catalysts for professionalizing oversight structures; however, a significant "governance paradox" emerges as AC size is positively correlated with violation frequency. This suggests a phenomenon of "governance ritualism" or "window dressing" in emerging markets, where structural expansion serves as a symbolic "decoupling signal" rather than a substantive deterrent. Theoretically, this research synthesizes Agency Theory and Resource Dependence Theory to extend the literature by decomposing the "black box" of governance, demonstrating that board efficacy is intrinsically linked to how attributes shape specialized sub-committees. Practically, the results caution regulators and investors against over-relying on superficial metrics, emphasizing the need for substantive monitoring quality, financial expertise, and gender diversity to foster a transparent and sustainable capital market in transitional economies.