Power in the boardroom: a study on Turkish family-owned and listed companies

Abstract

Purpose - The purpose of this study is to understand the power dynamics of the boards of directors in family-owned and listed Turkish companies. Power and dominance in the boardroom can be studied in relation to three variables: the institutional environment in which the firm is embedded; the structural configurations of the board; and the top manager's propensity to exercise his/her power resources. Focusing on the board level, this paper aims to conceptualize power dynamics as being composed of structural attributes, roles assumed, responsibilities, dependency and representation. Design/methodology/approach - The research domain of this exploratory study is family-owned and listed companies operating on the Istanbul Stock Exchange (ISE). The data for the study were collected from three different sources: a survey administered to members of the boards of directors; discourse analysis of corporate governance compliance reports of the same companies; and in- depth interviews conducted with board members. Findings - This study shows that on a typical board of directors of a family-owned and listed Turkish company, the interests of owners and managers are aligned and other stakeholders are not represented; the role of the board is confined to visibility and legitimacy and does not include control. Originality/value - This paper argues that theories developed for Anglo-Saxon equity-market based business systems have limited exploratory power for an emerging economy - namely Turkey - that is based on a business system characterized by close co-operation between the state, family-owned businesses and financial markets.