英文摘要 |
An issue, which has recently assumed importance, is the studying of the effectiveness of corporate governance from the point of top executive turnover. Published paper has shown that the likelihood of top executive turnover is negatively related to firm performance in effective corporate governance situation. This paper researches the effectiveness of internal corporate governance and external corporate governance in relation to top executive turnover in Taiwan stock-listed firms. First we test top executive turnover rate in relation to the firms performance. Furthermore, we examine the improvement in firm performance subsequent to top executive turnover. Finally, this paper tests the impact of the interaction of management ownership, external corporate governance and firm performance on top executive turnover. In our paper, the top executives include the president and the general manager.
We find that the turnover rate of top executives is significantly higher in poorly performed corporations. However, after the general manager leaves, the stock price of the corporation is significantly higher. This result shows that investors respond well to general manager turnover in Taiwan stock-listed firms. As top executive ownership increases, the negative relationship between corporation performance and top executive turnover rate reduces. In this paper the external governance refers to external director ratio, institutional holding ratio, or external blockholders. The finding is that the interactions between the variables of the external governance and president’s ownership are not significantly negative. This represents that within our country the external governance system can weaken the negative. This represent that within our country the external governance system can weaken the negative effect of the president’s ownership on his turnover. Furthermore, external blockholders play a significant role in monitoring the general managers in the corporations. Although the amount of holding of stocks that the general mangers own are inversely related to their turnover, the existence of external major stock holder reduces the negative effect of general managers’ ownership. |