Détresse Financière et Gouvernance d'Entreprise

This article examines the relationship between corporate governance in Lebanon and performance in financially distressed companies. Working under the auspices of agency theory assumption that decline is a situation where deteriorating performance exemplifies the deviation in managerial efforts to satisfy the shareholders interests. Firms enter financial distress as the result of economic distress, declines in their performance and poor management. The first research question focuses on the influence of declining performance on changes in the corporate governance mechanism. Relationships between corporate governance characteristics and financial distress status are examined within a sample of Lebanese firms that leads to a conclusion stating that the board of director’s characteristics explain financial distress, beyond an exclusive reliance on financial indicators.