Study On The Relation Between Top Management Turnover And Company Performance

With the constant improvement of our country securities market, their roles in economic lifeare significantly enhanced, and they have become the backbone of the national economicdevelopment. In the context of ownership and management separated, top managements of thelisted company are responsible for the operation and decision-making. They play a vital role inthe situation and strategic direction for the development of the company. Due to topmanagements are on special position and the number of top managements turnover rise in recentyears, people increasingly pay attention to the phenomenon of top management turnover.After reading related literature, we analysis the relation between top management turnoverand company performance in listed companies based on the principal-agent theory, the theory ofcorporate governance and the principle of ultimate ownership. We selected listed company datafrom2006to2011to study the relation between top management turnover and companyperformance before and after the top management turnover. Considering the state-ownedenterprise is the principal part of listed companies in our country, we further consider theinfluence of ownership structure and regional economy to the relation between top managementturnover and company performance in the state-owned enterprise. Research results show that:top management turnover in the loss-making company and company performance before topmanagement turnover exist significant negative correlation, but profitable company does notexist this significant correlation; profit earnings in profitable company dropped significantly aftertop management turnover, but loss of earnings did not change significantly; ownership structureand regional economy has negative influence to the relation between top management turnoverand company performance in the state-owned enterprise.