Should They Stay or Should They Go? CEO Appointments and Performance in a Transitional Economy

This study examines the corporate operating performance surrounding CEO appointments from 2001-2013 to firms listed on the Warsaw Stock Exchange. We find that the decision to reappoint or to replace a CEO is preceded by a decline in corporate operating performance. We fail to find, however, improvements or stability in operating performance following either the replacement or reappointment of the incumbent CEO. The likelihood of CEO replacement is greater if the firm does not perform well in the period preceding the appointment. We conclude that there are inefficiencies or inadequacies in the corporate governance system of Polish publicly traded firms.