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Understanding the relationship between governance mechanisms, firm performance and CEO power within Tunisian context

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  • Rym Hachana
  • Sana Ben Cheikh

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.

Suggested Citation

  • Rym Hachana & Sana Ben Cheikh, 2012. "Understanding the relationship between governance mechanisms, firm performance and CEO power within Tunisian context," International Journal of Business and Emerging Markets, Inderscience Enterprises Ltd, vol. 4(3), pages 241-257.
    • Handle: RePEc:ids:ijbema:v:4:y:2012:i:3:p:241-257
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    Cited by:

    1. Shalini Talwar, 2020. "Dynamics of Firm Value, Financial Performance, Leverage, and Governance: A Panel Data Analysis of Listed Indian Firms," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 19(2), pages 201-219, September.

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