Title: Board of directors and financial decisions of Tunisian firms

Authors: Hentati Fakher; Bouri Abdelfettah

Addresses: Economic Sciences and Management, University of Sfax, 1088, Tunisia. ' Economic Sciences and Management, University of Sfax, 1088, Tunisia

Abstract: The board of directors constitutes an internal mechanism of governance whose effectiveness has an impact on the creation of a firm value. Its influence on the financial performance of the firm is the subject of advanced researches. However, the study of its impact on the strategic decisions taken by financial direction is less covered. The objective of this article is to study the impact of the board of directors on the financial decisions taken by Tunisian enterprises. From the econometric tests applied to Tunisian data of panel in the period between 1999 and 2005, the present study shows that the board of directors of firms does not constitute an effective tool of control in order to orient financial decisions to the interest of shareholders. This corroborates the entrenchment theory hypothesis and rejects the arguments of the agency theory.

Keywords: board of directors; financial decisions; Tunisia; firm value; corporate governance; strategic decisions; entrenchment theory; agency theory.

DOI: 10.1504/AJAAF.2012.046129

African Journal of Accounting, Auditing and Finance, 2012 Vol.1 No.1, pp.101 - 112

Published online: 31 Jul 2014 *

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