Comparing board-level governance at MNEs and local firms: lessons from Turkey

Abstract

Abstract Multinational enterprises (MNEs) have been the subject of academic research from a variety of perspectives. However, the question of whether and how MNEs differ from local businesses in terms of their corporate governance mechanisms concerning the way they are directed and controlled by the board of directors is still largely unexplored. This question must be answered before researchers, policy makers and managers can identify action areas to improve governance and accountability in MNEs. In this paper, we empirically analyze the structures, systems and effectiveness of evaluation processes relating to the board of directors in MNEs and local companies in Turkey, an emerging country. We identify the significant differences on various key aspects of corporate governance among the groups, explore reasons to explain these differences and draw implications for further study of corporate governance in MNEs. A conceptual model is presented where institutional and organizational factors leading to governance differences are linked to how MNEs configure their boards in a host country setting.