IMPACTS OF CORPORATE GOVERNANCE AND PERFORMANCE ON MANAGERIAL TURNOVER IN RUSSIAN FIRMS
In this paper, we deliberate the possible impacts of corporate governance and performance on managerial turnover using a unique dataset of Russian corporations. This study is different from most previous works in that we deal with not only CEO dismissals, but also with managerial turnover in a company as a whole. We find that nonpayment of dividends is correlated significantly with managerial turnover. We also find that the presence of dominant shareholders and foreign investors is another important factor in causing managerial dismissal in Russian corporations, but these two kinds of company owners reveal different effects in terms of turnover magnitude.
Establishing an effective governance system to discipline top management to produce maximized shareholder wealth is very important, because the diffuse ownership structure in public companies means that shareholders must delegate the daily management of a business to professional managers, and they do not always bend over backward to satisfy their principals.