Content area
Full Text
Public Organiz Rev (2014) 14:83108
DOI 10.1007/s11115-012-0207-6
Published online: 11 December 2012# Springer Science+Business Media New York 2012
Abstract The aim of this paper is to shed light on the cognitive as well as the disciplinary role of one important governance mechanism that is the board of directors in a privatization context. Using a sample of privatized French companies, we examine the relationship between the size, component and structure of this mechanism to the performance and value creation on the post privatization period. Thus, the majority of our findings have support on the theory of cognitive governance, one aspect of governance that was ignored in previous research.
Keywords Board of directors . Cognitive theory of governance . Financial and legal theory of governance . Privatization . Performance . Value creation
Introduction
Defined as the transfer of assets by public officials to private agents (Megginson and Netter 2001), privatization represents a particularly favorable context to the central question related to the functioning of companies. It raises the question of organizational processes and performance factors involved in the underlying level of efficiency of the firm. It is often much more than a simple transfer of ownership. Indeed, it may be accompanied by a change in leadership or even more likely a critical change in the organization of legislative or executive authority of the company. In the latter case, the change in ownership is associated with a change in the mode of corporate governance.
M. Mrad (*) : S. Hallara
Department of Finance, Higher Institute of Management, 41, Rue de la Libert, Bouchoucha - 2000 Bardo, Tunisiae-mail: [email protected]
S. Hallarae-mail: [email protected]
The Relationship Between the Board of Directors and the Performance/Value Creation in a Context of Privatization: The Case of French Companies
Mouna Mrad & Slaheddine Hallara
84 M. Mrad, S. Hallara
By analyzing inside the black box, it is clear that privatization leads to profound organizational changes. These changes take place according to Chatelin (2001), mainly at three levels:
& Decision-making& The governance system& The level of value appropriated by each member of the company.
The least we can say at this stage is that in prospecting the internal organizational changes resulting from privatization, the traditional concept of a single ownership change is exceeded. In this...