Corporate Performance Impact over the Dismissal of CEO and Changes in the Board: the Evidence from Russia

In this paper we study how firm performance influences the CEO turnover and changes in board of directors in Russia. We find evidence of a negative relationship between firm performance and CEO turnover, using sample of Russian public companies in 12 years’ period from 2003 to 2014. We study the performance-turnover relations separately for companies with state participation in ownership and with large private shareholder. We find that CEO turnover in companies controlled by a large private shareholder depends on both performance metrics: accounting-based and market-value based, while for companies with state participation CEO is estimated only for market-value based performance. We also investigate how financial architecture and CEO human capital can influence the performance - turnover relations. As for board changes, we find that the performance has no impact on the probability of Chairman changes, while for changes of majority of directors in the board we receive that performance has influence on board changes. We also study how boards characteristics influence the performance-board changes relations.