This study examines the relationship between top management turnover (i.e. investment directors) and investment performance for actively managed Australian funds. This issue is significant given the importance of executive management in the implementation of the institution's investment strategy, the sizeable assets under their control, as well as the overall success and profitability of the funds management operation. In addition, investors, asset consultants, managed-fund ratings agencies and the financial media devote significant resources to the scrutiny of performance, the organisational activities, leadership and human capital of investment management firms. Accordingly, this study examines the impact of performance and fund-flow activity on top management turnover in both the pre-and-post replacement period. The research documents that turnover of underperforming investment managers results in significantly higher performance in the post-replacement period, while turnover coinciding with outperforming managers delivers investors significantly lower returns. The evidence also identifies significant changes in portfolio risk associated with managerial turnover. Finally, this research documents that underperforming investment managers exhibit significantly lower fund flows prior to replacement.