The Stability Of Managers And Corporate Performance

With the background of Full Circulation Reform' accomplishment,as well as the building of Multi-level Capital Market in processing,there comes a great improvement in the corporate government practice in China.Meanwhile,the importance of roles played by the professional managers' market also gradually improving.Especially in recent years,the rapid development of the Agency Share Transfer System greatly improving its corporate governance and internal control.Equity financing is facilitating corporate financing channels,while accelerating the process of separation of ownership and management rights,making more and more professional managers to participate in the company's operating level.Based on the perspective of traditional corporate finance,the separation of those two rights is related to the Principal-agent Theory,such as Moral Hazard.On the other hand,based on the Upper Echelons Theory,the various characteristics of managers will affect the enterprises.The stability of the managers' position will influence managers' attitude about reform and the �Agency Costs� caused by them.Both of those factors ultimately will be reflected in the corporate performance.The listed companies is the pioneers of China's corporate governance.Through the empirical evidence of those listed company,we explore the impact of managers' position stability in corporate performance.Through the empirical research,this paper finds out that among the listed company in China,the stability of the managers,represented by CEO,has a significant impact on company performance,there is a nonlinear relationship between those two,which displayed as the inverted U type.This means the company performance will be the best when the managers' position stability is in the moderate mood,too stable or too frequently turnover both can do harm to the performance.The relevant policy recommendations for the corporate governance is it should pay more attention to the turnover of managers,not only to ensure that the managers has enough time to adapt to the company system,but also to prevent the harmful effect caused by the phenomenon of �Insider�.