<p>This study investigates the relationship between CEO power, firm leverage, and firm performance based on capital structure theory, behavioral finance, agency theory, and institutional theory. The study applies a fixed effects regression model and a robust two-stage least squares (2SLS) analysis using a generalized method of moments (GMM) model to a database of five emerging ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) for the 2017–2021 period and provides important findings. First, the analysis reveals that CEO power significantly increases financial leverage. However, strong corporate governance mitigates the adverse effects of entrenchment, shielding firm performance from potential risks. Second, the results show that country risk amplifies the moderating effect of corporate governance. Finally, we found a mediating role of firm leverage in the effect of CEO power on firm performance. This study advances the knowledge on the contributory role of corporate governance in relation to the structure of the executive board and shareholders, as well as on financial management.</p>