Empirical Reseach On The Relationship Between Listed Company's CEO Turnover And Operating Performance

Under the modern enterprise system, CEO is the key elements of business growth, his management capability can be seen as important strategic resources of an enterprise. As the company's most important personnel changes,CEO turnover must have a certain impact on the company's operating performance and day-to-day management, and will also touch on the interests of stakeholders. After the development of more than 40 years, the foreign scholars have built a system of CEO turnover, while the corresponding research results is less since the domestic research just started in the early 1990s.This paper attempts to base on Chinese practice, and selects 137 companies which experinced CEO turnover in the years 2004-2005 from the companies listed on before the end of 2000 as samples. The purpose of this paper is to study the relationship between CEO turnover and enterprise's operating performance,and to search for the related impact on the relevant stakeholders and changes in performance using empirical methods. This paper comes to the following conclusions: the company's performance in continuous decline or a decrease would lead to the replacement of CEO; the turnover of CEO is more frequently in non-state-holding enterprises than those in state-holding enterprises; CEO of shareholding has some extent constrained effect on the turnover of themselves; CEO participating in the board can form a defense effect, which can lower its turnover rate;independent directors do not play the supervisory role on CEO turnover. Meanwhile, this paper has also found that: The outsiders which are mainly from the professional manager market do not play a positive role on the operating performance improvements in the next two years after the turnover, even more ,they could lead to the decline in performance; the insiders which have work experience within companies will not have a significant impact on the performance after CEO changes. We expect that the research will play a guiding significance on improving our corporate governance standards and operating performance.