Empirical Study On Effect Of Corporate Governance On Disciplinary Top Manager Turnover

Top managers' turnover is an important content of corporate governance, and is a result from firm inner and outside governance mechanisms combined act. Just as Jensen & Warner (1988) said:"turnover of firm top managers is a key index understanding the variable restraining manager and judging the efficiency of corporate governance mechanism". In recent years, with Chinese securities market scales gradually, large number of top manager turnover events has happened in Chinese listed companies. The frequently happening of top manager turnover has aroused widespread concern of the general public. It become the hot topical in the practitioners and theorists. The reasons for the top manager turnover are the important aspect. Since many of China's listed companies made by state-owned enterprise reform, has many unique attributes, such as principal-agent chain length, multiple principal-agent, they lack the main body with ultimate Property right and so on. At the same time, although China has experienced a process of corporate system reforms for over10 years, but the internal and external corporate governance mechanism is far from scientific, running is often a lack of efficiency in the management of deviation, acting against the interests of business owners everywhere. With the background of poor corporate governance, to how much extent does the turnover of top managers reflect our country's corporate governance? Executives change events really help to improve their quality of governance of listed companies? These questions are worthy of us to examine in detail.According to the different reasons of the turnover, top manager turnover can be divided into disciplinary top manager turnover and non-disciplinary top manager turnover. Disciplinary top manager turnover is an important element of corporate governance. And in our particular system environment, disciplinary top manager turnover are the result of governance mechanism. Efficiently internal corporate governance mechanism is not only to replacement of senior management in time, but also can select higher management. Therefore, by exploring the correlation between internal governance mechanisms and disciplinary top manager turnover, as well as the trend of the corporation performance changes in the corporations which has happened disciplinary top manager turnover, can test the effectiveness of internal governance mechanisms in Chinese listed companies, and can found the problem in Chinese listed companies.In this paper, on the basis of related literature review, on the foundation theory of agent theory and the corporate governance theory, from the point of internal governance mechanisms, we analyze the companies whose happened disciplinary top manager turnover during 2006 year. By analyzing the correlation between the internal governance and disciplinary top manager turnover, and the trend of the corporation performance changes before and after the turnover, we can examine the effectiveness of internal governance mechanisms. The empirical results show that, during many variables of the internal governance, only part-time chairman and general manager of the situation, the proportion of paid directors, and the proportion of corporate shares have remarkable effects on the disciplinary top manager turnover. The board size, ratio of independent directors, the Board acts, the proportion of state-owned shares, the proportion of tradable shares, the proportion of executives, as well as equity ownership concentration have no significant effect on the disciplinary top manager turnover. And there has no significant increase in corporate performance. All these indicating that our internal governance mechanism has some efficiency, but still need to improve.According to the empirical results, this paper gives some advices from the aspect of deepening the equity reform and strengthening of the construction of the functions of board of directors of listed companies and to accelerate the establishment of a manager market to strengthen the monitoring the top manager in the end of this paper.