Governance, Managers’ Entrenchment and Performance: Evidence in French Firms Listed in SBF 120

Dr. Sonia MOUSSA, Prof. Dr. Houssem RACHDI, Aymen AMMERI

Abstract


Research on managerial entrenchment is quickly gaining attention because of its implications for performance. This concept belongs to the field of corporate governance and little has been studied about it. This paper seeks to investigate the impact of managerial entrenchment on firm performance surrounding seniority and discretionary accruals using a sample of 40 French companies listed on the SBF 120 for the period 2002-2009. We find a significant relationship between management entrenchment, as measured by discretionary accruals, seniority and characteristics of board of directors. This reveals that board of directors contributes to the control of managers. The test of management entrenchment’s effect on performance remains statistically significant for all measures of firm performance (Return on Assets, Return on Equity, Tobin’s Q and Market to Book).

Keywords


Management entrenchment; Governance mechanisms; Performance; Seniority Discretionary accruals.

Full Text:

PDF


DOI: http://dx.doi.org/10.18533/ijbsr.v3i2.228

Refbacks

  • There are currently no refbacks.




Copyright (c)

 ...........................................................................................................................

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

............................................................................................................................

If you find difficulties in submitting manuscript please forward your doc file to support@thejournalofbusiness.org. Our support team will assist you in submission process and other technical matters.

In order to get notifications on inbox please add  this domain thejournalofbusiness.org in your email safe list.

International journal of business and social research (Print)
ISSN 2164-2540

International journal of business and social research (Online)
ISSN 2164-2559

[International Journal of Business and Social Research (IJBSR) previously published by MIR Center for Socio-Economic Research, MD, USA. From February 2018 this journal is published by the LAR Center Press, OR, USA]