The popular revolution of Tunisia and the system of corporate governance in the companies listed on the stock exchange

Abstract

This paper examines the specificities of the governance system in Tunisian companies through the remuneration policy for executives, the board and the ownership structure in the period before the revolution. The purpose of this work is to identify possible dysfunctions and subsequently propose ways of to rehabilitate governance mechanisms and optimize their effectiveness. The agency theory identifies the necessary conditions for effective controlling. Empirical validation on a panel of 30 Tunisian companies listed on the Tunis Stock Exchange and observed for two years (between 2008 and 2009), Shows firstly that the policy of executive compensation is not a mechanism for effective governance, and secondly that the impact of internal control mechanisms on performance, through its components, seems mixed.