“…Public disclosure of rule violations likely jeopardizes an organization's legitimacy, hinders its resource acquisition, and reduces stakeholder confidence (Deephouse, 1999). Several studies have shown that Chinese firms that were punished for illegitimate activities suffer from legitimacy discount in the public (Wang, 2010;Wang, Liu, et al, 2021;Zhang, Xu, Chen, & Jing, 2020), while culpable leaders (executives and directors) can also be stigmatized or dismissed (Conyon & He, 2016;Firth et al, 2011;Firth, Wong, Xin, & Yick, 2016). Therefore, to maintain regulators' good faith, culpable leaders are strongly motivated to conceal information in order to protect their jobs, reputations, or other personal (or small group) interests (Gundeep, 2017).…”