
Purpose
This paper aims to investigate the impact of board characteristics on CEO turnover performance relationship (TPR) in Indian listed firms.


Design/methodology/approach
A subset of the Standard and Poor’s Bombay Stock Exchange 500 (S&P BSE 500) Index companies was analyzed over the period 2015–2019 using the logistic (fixed-effects) regression model.


Findings
It was found that a weak relationship exists between CEO turnover and firm performance. With respect to board characteristics, board size was found to have a significant role in strengthening the TPR. However, other characteristics, such as board independence, multiple directors, board meetings and board gender diversity, played no role in influencing the TPR.


Research limitations/implications
First, the study period is limited to five years, during which several sample firms did not face any CEO turnover event leading to small sample size. Second, this study considers only the board’s gender diversity, whereas other types of diversity are omitted. Third, this study does not differentiate between insider and professional CEOs.


Practical implications
The findings suggest that regulators should focus on the effective enforcement of laws to strengthen the TPR and improve the monitoring role of boards, particularly in emerging economies like India, which face type II agency problems in addition to traditional principal–agent conflict. The results also offer implications for corporations, investors and academic researchers, highlighting areas that need considerable attention pertaining to corporate governance.


Originality/value
This study discerns the impact of several board-related characteristics on the TPR, particularly after the introduction of the new Companies Act 2013 in the emerging economy of India, where it has not been explored extensively.


Board characteristics and CEO turnover–performance relationship: evidence from India

We examine the effect of non-controlling shareholders (NCSs) on innovation in Chinese state-owned enterprises (SOEs). Using a sample of Chinese SOEs during 2007–2016, we find that the voting rights of NCSs positively relate to SOEs’ innovation. Furthermore, we distinguish the identities of NCSs in terms of state-owned attributes and show that this positive relationship is concentrated in SOEs whose NCSs are state-owned. Additionally, we find that the effect of NCSs is more pronounced in financially constrained SOEs, and that SOEs with influential NCSs reduce inefficient investments while make more R&D investments. Overall, our results indicate that influential NCSs have a positive effect on SOEs’ innovation through retaining more resources for innovation projects, and this effect varies somewhat depending on the state-owned attributes of NCSs. 

Non-Controlling Shareholders and Innovation: Evidence from Chinese State-Owned Enterprises

ABSTRACT We examine the effect of non-controlling shareholders (NCSs) on innovation in Chinese state-owned enterprises (SOEs). Using a sample of Chinese SOEs during 2007–2016, we find that the voting rights of NCSs positively relate to SOEs’ innovation. Furthermore, we distinguish the identities of NCSs in terms of state-owned attributes and show that this positive relationship is concentrated in SOEs whose NCSs are state-owned. Additionally, we find that the effect of NCSs is more pronounced in financially constrained SOEs, and that SOEs with influential NCSs reduce inefficient investments while make more R&D investments. Overall, our results indicate that influential NCSs have a positive effect on SOEs’ innovation through retaining more resources for innovation projects, and this effect varies somewhat depending on the state-owned attributes of NCSs.

Ruohan Zhong

Papers

Multiple large shareholders, control contests, and forced CEO turnover