Firm performance, Boards of Directors and CEO Turnover-An Empirical Analysis of Listed Companies in China
A large amount of literature has been written on CEO turnover for the case of developed countries; however, not much work has been done for transitional economies, such as China. This paper studies the relationships between the characteristics of the board, firm performance and CEO turnover by employing a sample of 489 Chinese listed companies from 1997 to 2003. CEO turnover is categorized into two categories: forced CEO turnover and routine CEO turnover in this research. Four important empirical results have been found in this research as follows. The first result of this research is:CEO turnover is significantly and negatively related to firm performance, which indicates that as an extreme monitoring measure, CEO turnover, especially the forced CEO turnover, works as managerial incentive mechanism in Chinese listed companies. The second empirical result is: the possibility of CEO turnover remarkably declines when the same individual serves as both the CEO and the Chairperson of the board, which demonstrates that the concentration of decision management and decision control in one individual enhances the bargaining power of the CEO and weakens the independence of the board, therefore the boards effectiveness in monitoring the CEO reduces in China. The third result is: the possibility that the poorly performed CEO could be dismissed increases when the ratio of independent directors on the board is higher, which illustrates that the independent directors system is propitious to promote the monitoring effectiveness of a board in China. The last finding is: the relationship between boards size and CEO turnover is insignificant. It shows that boards size has no impact on the monitoring effectiveness of the board to the CEO.
Boards of Directors CEO turnover Firm performance
PI Li-li Lowe Julian
School of Business, University of Ballarat,Guangzhou Academy of Social Science School of Business, University of Ballarat
国际会议
4th International Symposium on Soft Science Innovation Nation：Theory and Practice(第四届软科学国际研讨会)
北京
英文
184-199
2006-11-28（万方平台首次上网日期，不代表论文的发表时间）