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CEO power as an important mechanism of corporate governance: available funds and social engagements

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  • Sihem Bouguila
  • Victor Surjit

Abstract

While there are growing bodies of research examining corporate governance effect on corporate social performance, little has been done in examining the effect of manager power on Corporate Social Performance (CSP). This study addresses this issue by examining 256 top citizens firms to show that CEO power can influence the financial performance and therefore can affect the social performance. We found that good level of CEO compensation and his social humanities background with an effective control of outsiders may align the managers' interests on these of others stakeholders. This effect is not direct and it should be moderated by the achievement of good financial performance in order to generate available funds which will be used to finance the costs of the social demands. There is positive synergy between the financial and the social demands if the managers have the initiative to serve and balance all the interest of the stakeholders.

Suggested Citation

  • Sihem Bouguila & Victor Surjit, 2022. "CEO power as an important mechanism of corporate governance: available funds and social engagements," International Journal of Applied Management Science, Inderscience Enterprises Ltd, vol. 14(4), pages 356-371.
    • Handle: RePEc:ids:injams:v:14:y:2022:i:4:p:356-371
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