Ceo Authority And Company’s Performance Fluctuation

The argument of agent issue had never stopped since the ownership and management was separate. CEO system made up the serious defeat in business management, lead to the efficient development of enterprise, but it also has many defects, there are so many financial scandals constantly, too much power of the CEO known as the main problem. Since1990, many Chinese companies have been introduced CEO system. We could see some CEO of enterprises abused their authority, injured the interests of companies as we saw the improved efficiency of enterprises which caused by CEO system. Especially for some CEO’s private decision authority expanded and lack of effective restraint, more likely to lead to larger changes of the company’s decision and cause more serious fluctuation performance of the company. Therefore, further improve for the corporate governance of listed companies is urgent questions for the healthy development of the securities markets of our country.Based on review for the former references, the thesis is taking the company’s performance fluctuation as a starting point, to see the administrators’authority at the viewpoint of policy decision of executive management team, executive authority can be divide into4differences dimension, primarily studied the top CEO authority of the enterprise management. Whether or not, his decision-making authority will lead to a larger wave property for the enterprise’s operation. The study of this paper is extended the realization for the company’s performance fluctuation in a certain degree and also provided some references for the development of small and medium enterprise board listed companies, and also have a certain sense of practice for the governance perfection of listed company.Through analysis the study data of2004-2013for small and medium enterprise board listed companies, drawing the following conclusions:firstly, there is an apparent dependence relation between CEO total authority and enterprises’performance fluctuation. The more authority the CEO has the more enterprise performance fluctuation. Secondly, the CEO decision-making authority contains different dimension, its will have different effectiveness. Among them, structure, reputation and position stable authority both have significantly influence for performance fluctuation, the lager dimension those authority, the greater performance fluctuation, the owners’ authority has a apparently side effect for performance fluctuation, and the owner respectively generate authoritative cross variable with other three authorities are still negative influence. Therefore, the more power the owner has, the lesser performance fluctuation. Thirdly, financial constraint have positive influence for company’s performance fluctuation, higher financial constraint company accompanied higher performance fluctuation; fourthly, when the owner of the company is government, the influence of CEO authority for company’s performance fluctuation will be reduced, therefore, the government controlled company have a lower influence for performance fluctuation often. Through the empirical research come to a conclusion, This paper presents that we should be adequately weigh the cost and benefits of CEO power when chose CEO, also need to perfect the CEO selection mechanism, correction mechanism and risk-control mechanism, to improve corporate governance issue and stability of enterprise performance fluctuation.