Public vs Private Ownership, Board Structure and Fund Manager Turnover
Financial Management Volume 42, Issue 1, pages 127–154, Spring 2013
39 Pages Posted: 23 Oct 2009 Last revised: 21 Oct 2014
Date Written: April 13, 2011
We examine the relation between organizational structure (public vs private) and managerial turnover in a large sample of U.S. offered mutual funds. Consistent with the hypothesis that publicly traded firms focus more on shorter term performance, we find that public sponsors are more sensitive to prior fund performance when making replacement decisions and experience smaller post turnover performance improvements. Additional testing suggests a higher likelihood of fund manager replacement when mutual funds are team managed and when fund boards more independent. Overall, our results indicate that organizational form plays a pivotal role in the managerial labor market for mutual funds.
Keywords: Mutual funds, board structure, organizational structure, managerial turnover
JEL Classification: G20, G32, G34
Suggested Citation: Suggested Citation