CEO Social Power, Board Inclusiveness, and Corporate Performance after Ethnic Conflicts

We investigate the impact of CEO power on corporate performance in Sri Lanka, characterized by demarcated ethno-linguistic and religious boundaries and devastating ethnic conflicts with subsequent reconciliation. We focus on a CEO’s social-dominance power, based on ethnicity, gender, and political connections. Social-dominance power (lack of ethno-religious-linguistic and gender diversity) augments agency conflicts and worsens corporate performance and financial stability in the post-civil-war era. Board inclusiveness (representing different ethnicities, religions, languages, and gender) at the top decision and monitoring levels of corporations positively affects performance.