Based on China’s listed company data from 2004 to 2012，this paper studies institutional investors’corporate governance effect from the perspective of top management turnover，and tries to find out the influence mechanism of top management turnover events on stock volatility from the perspective of investor behavior． The empirical results show that: 1) For those companies which suffer losses，institutional investors evacuation can form a strong external pressure，forcing executives to leave． But for those companies which still remain profitable，institutional investor’s pressure is not obvious． Overall，business performance has always been the main reason for top management turnover，and institutional investors in China have always played their part by“voting with their feet”; 2) Compulsory executive alteration is a negative signal to institutional investors，the new executive cannot restore the institutional investors’confidence in the stock holding; 3 ) The noise traders ( small individual investors) tend to interpret executives turnover in companies suffering losses as good news，whose active buying enlarges the fluctuation of the stock price directly after the turnover happened．