Understanding the relationship between governance mechanisms, firm performance and CEO power within Tunisian context
by Rym Hachana; Sana Ben Cheikh
International Journal of Business and Emerging Markets (IJBEM), Vol. 4, No. 3, 2012

Abstract: This paper attempts to explain how structural power, prestige power and ownership power shaped CEO power within the Tunisian context, and how it can be determined by governance mechanisms and organisational performance. A sample of 39 Tunisian listed firms for the period 2000-2007 was adopted. The empirical methodology falls into three steps: a multidimensional proxy was established to reveal the CEO's power intensity; a Principal Component Analysis (PCA) was selected to retain the most relevant governance mechanisms; a panel data regression was applied to test empirically the association between governance, performance and CEO power. The results demonstrate that an effective board involves a less powerful CEO. Furthermore, our analysis highlights that family-owned firms, which is the nature of the most Tunisian firms, allow CEO to accumulate more power.

Online publication date: Sat, 15-Nov-2014

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