Mandatory Change Of The Board Of Directors Of The Company Based On Different Levels Of Performance Characteristics And Executives

The top managements are the most influential people in the listed company. They can decide the investment, operation and financial affairs of the company. The change of top managements is considered the most important strategic decision to managers and investment. The research of top managements began in the 60th of the 20th century. And the research mainly focused on the inner and outside factors of top managements changes from the company governance point of view. The research conclusion shows low corporate performance was the most important reason of the change and the characteristics of the board of directors also influence changes of top managements. To the leadership structure of the directorate, some scholars considered there is negative relationship between duality leadership structure and top management turnover, others think opposite.To the size of directorate, some scholars considered there is a remarkable negative relationship between top management turnover and the size of directorate, others reckon they are positive relationship. Because every scholars chose different indexes and stylebooks, they got different inclusion. But there are few literatures used different performance seeing about the relationship of these variable. So low corporate performance can make for top managements turnover, but would high corporate performance also make for turnover? How the directorate influence the turnover of top managements with different performance?This thesis would firstly review the early research conducted by scholars, and then conduct an empirical study on the relationship between top management changes and corporate performance by collecting the top management change data of our listed companies in 2007. we firstly divide corporate into three different state:bad performance, commonly performance and high performance. Then we study the turnover in three performances and get conclusion as follows:(1) Both low and high performance can make for top managements turnover.(2) In bad performance corporate, When the top manager and chairperson is the same person, the probability of turnover would be increased. But in commonly and high performance corporate, When the top manager and chairperson is the same person, the probability of turnover would be reduced. In all companies there is a remarkable positive relationship between the percent of independent directors and turnovers. However the directorate size has no effects on the disciplinary top manager turnover.According to the results, this paper gives some advices to strengthen the monitoring the top manager in the end of this paper.