Changes in corporate management: do they have an impact on share prices and company earnings?

Reviews previous research on share price response to annoucements of changes in top management and the accounting policies/reported earnings around such changes. Uses 1989‐1992 UK data for a sample of 420 announcements of changes in top management, divided into routine departures, non‐routine departures and appointments, to analyse share price reaction and accounting performance. Finds insignificant price reactions but identifies consistent patterns in operating profit in the years before and after the change, according to the type of change involved. Considers consistency with other research, the underlying reasons for the findings and the limitations of the study. Promises further research to explore changes in industry‐adjusted gearing, liquidity and activity ratios when senior executives come and go.