Turnover and Succession of CEOs in Russian Public Companies

Nowadays in a highly competitive and volatile business environment corporate governance seeks to answer the question of how the Board of Directors selects the CEO's successor. This paper examines the factors at the level of firms and CEOs that determine the turnover of management and CEO selection. CEO succession is a choice between appointing one of the company's employees (an insider CEO) or an external manager (an outsider CEO). Our dataset includes information about 650 the largest Russian listed on MOEX companies from 2010 to 2018. In the empirical part firstly, we evaluate the relationship between CEO succession and characteristics of firms, taking into account individual characteristics of CEOs. Next, we focus on the effect of CEO successor origin (insider vs outsider) on firm performance. In particular, we study the consequences of appointing new internal or external CEO compared to companies where there was no change in management. Our own empirical research seems to indicate quite clearly that in the short-term companies can fare better being led by CEOs groomed from the inside, as opposed to CEOs chosen from the outside. This paper consists of an introduction, three section, a conclusion, and a list of references. Key words: CEO turnover, CEO succession, Corporate Governance.