Research On The Determinants On The Board Of Directors' Decisions On The Dismissal Of Senior Managers:Interference From Industry And Market

Recently,the no routine turnover of the senior managers of listed companies has aroused the concern of investors,and gradually become a hot topic among society.The no routine turnover of the senior managers is a reflection of the corporate governance mechanism that the boards of directors dismiss the low-capacity managers to help the company get rid of the development dilemma,adjust the business strategy and maintain a competitive advantage.However,in view of the company's performance is not entirely determined by the senior managers,so within efficient governance mechanism,the factors beyond the control of senior managers(industry and market performance)should be excluded when the boards of directors decide whether to dismiss or keep the managers.This research is not only helpful to understand the current situation of corporate governance of listed companies in China,but also promotes the perfection of the evaluation mechanism of the whole society,so it has strong theoretical and practical significance.This paper mainly explores the existence of the interference effect of the factors beyond the control of senior managers,and discusses the specific mechanism of the interference effect.On the basis of the present situation,this paper further compares the differences in the degree of interference between different types of companies and different types of managers based on China's special system and functional division of Chinese companies.This paper first systematically analyzes how the factors beyond the control of the managers influence the decision-making process of the board of directors and discusses the different degree of interference effect by external industry and market perfonnance between different kinds of companies and different kinds of managers.The paper also analyzes the specific mechanism of the interference effect of the board of directors in the decision-making of the senior managers and analyzes the reason of difference of the interference effect between the different ownership type companies and the different level of the functional categories.Then,this paper chooses the fixed effect model,the logit model and the cox proportional risk regression model to test the existence of the interference effect of the external industry and market performance on the board's decision and combines with the type of company ownership and executive types to carry out in-depth development of research,and gives a reasonable theoretical and practical explanation for the estimated results.After theoretical and empirical analysis,this paper puts forward relevant policy enlightenment and suggestion based on the current domestic corporate governance.Based on the theoretical analysis and empirical test,this paper draws the following conclusions:First of all,whether it is state-controlled listed companies or private listed companies,the company's performance is influenced by the external industry and market performance,and the current board of directors of listed companies failed to completely exclude external industry and market factors.Secondly,the board of directors of private listed companies is more concerned about the ability of senior managers while the board of directors of state-controlled listed companies is more affected by external factors.Thirdly,the low-capacity managers are more easily affected by the external interference,so when the company is in a harsh environment,the governance mechanism of listed companies will be more easily to find out the low-capacity managers.Finally,after distinguishing the executive function,it was found that only the CEO was interfered with by external factors,and less interference is exerted on the boards of directors when deciding the fate of the board secretary and the chief financial officer.Therefore,in China,on the background of the moments that industry and market changes is increasingly complex,the internal functions of the company's internal management is not perfect and the unique system of the society lasts,it is meaningful to select the appropriate ability to measure the ability of executives,improve the functional division of the executive and internal and external constraints incentive mechanism to enhance corporate governance is critical,About the innovation of this paper is:Firstly,this paper introduces the ownership factor into the analysis frame and compares the degree of interference caused in the decision-making process of different types of company board of directors.Secondly,this paper uses the logit and cox models to carry out the regression analysis of the data respectively.It explores the influence of managers' tenures on the no routine turnover and the external factors on the no routine turnover and managers' tenures respectively.Thirdly,this paper takes into account the phenomenon of no routine turnover of different kinds of managers,and links the present situation of the division of functions of senior managers in China.