The Impact of CEO Turnover on Corporate Performance
Abstract
As core decision-makers of enterprises, CEOs determine long-term operational performance. CEO turnover is a critical corporate
governance event, divided into natural turnover and mandatory turnover, with two succession paths: internal promotion and external recruitment. Based on agency theory, organizational adaptation theory and tournament theory, this normative study targets China's A-share listed
firms and puts forward four core hypotheses. The results show mandatory CEO turnover improves long-term corporate performance despite
short-term adaptation costs. External successors excel at reforming and reviving declining companies, while internal candidates sustain stable
growth for profitable enterprises. This paper clarifies the situational differences of two succession modes and provides actionable governance
suggestions for listed companies.
governance event, divided into natural turnover and mandatory turnover, with two succession paths: internal promotion and external recruitment. Based on agency theory, organizational adaptation theory and tournament theory, this normative study targets China's A-share listed
firms and puts forward four core hypotheses. The results show mandatory CEO turnover improves long-term corporate performance despite
short-term adaptation costs. External successors excel at reforming and reviving declining companies, while internal candidates sustain stable
growth for profitable enterprises. This paper clarifies the situational differences of two succession modes and provides actionable governance
suggestions for listed companies.
Keywords
CEO turnover; Succession mode; Corporate performance; Corporate governance
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PDFReferences
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DOI: http://dx.doi.org/10.70711/memf.v3i10.10040
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