Top Management Team Diversity Research Articles

Gender diversity in top management teams and corporate reputation: Evidence from Spanish listed companies

AbstractCompanies gain significant advantages from having a favorable corporate reputation (CR), so researchers have analyzed the factors that contribute to the formation and maintenance of this intangible asset. One of these variables could be gender diversity in management. This study drew on stakeholder, signaling, and critical mass theories to explore how women in firms' top management teams (TMTs) can influence these organizations' CR. A sample of data on Spanish listed companies were collected for the period of 2017–2022. The results reveal that a positive relationship exists between gender diversity in TMTs and CR and that this relationship is moderated by women on boards of directors and by board independence. The findings contribute to the literature by providing evidence of top management's influence on CR. This empirical research also expands the literature on gender diversity in organizations by demonstrating that the positive impact of gender diversity on CR extends beyond boards of directors.

Exploring the Relationship between Top Management Team Characteristics and Corporate Social Responsibility: A Literature Review and Bibliometric Analysis

In the evolving landscape of corporate governance, the role of Top Management Teams (TMTs) has transcended traditional decision-making paradigms, becoming integral to the implementation of Corporate Social Responsibility (CSR). While the existing literature has identified general trends in TMT diversity, stability, and leadership styles, there is a lack of comprehensive analysis focusing on the interplay of these characteristics and their direct implications for CSR strategies. This study employs a literature review and bibliometric analysis of the existing literature up to 2023, utilizing the Scopus database to discern trends and patterns in the TMT–CSR relationship. Findings reveal that TMT characteristics, including diversity in gender, age, and professional background, significantly influence CSR strategies, enhancing organizations’ responsiveness to stakeholder needs. Notably, diverse TMTs demonstrate a greater capacity for developing comprehensive CSR initiatives, particularly when led by executives committed to sustainability and ethical practices. The analysis indicates a growing scholarly interest in this intersection, with a marked increase in publications over the past decade, highlighting the strategic importance of TMTs in shaping CSR outcomes. However, the identified research gaps suggest a need for further exploration of context-specific approaches, particularly in varying regional and industry settings, as well as longitudinal studies to capture the dynamic nature of TMT–CSR relationships over time.

Foreign-origin managers and FDI location choice

AbstractBuilding upon the upper echelons theory of organizations as applied to internationalization strategies, we investigate the impact of foreign-origin top management team (TMT) members on their companies’ location choice. We propose that a manager-from-target effect may exist, by which a manager’s knowledge of their country of origin increases the likelihood of choosing that country as a target. We expect it to be stronger for acquisitions than for greenfield investments, the inputs of foreign-origin managers being more relevant in the first case. Based on a large sample of foreign direct investment from 2013 to 2019, and using name analysis to identify TMT members’ origins, we find that the effect is present in both establishment modes but larger and more robust for acquisitions. It is also larger in companies with less diverse TMTs, for which targeting one manager’s country of origin instead of others’ may be less likely to cause conflict. Future research should explore whether investments in locations suggested by managers from the target country outperform others. If this is the case, it implies that recruiting foreign-origin top managers can improve a company’s internationalization strategy via better location choices.

Does diversity in top management and boards affect ESG performance? Evidence from Islamic and conventional banks in the MENA region

Purpose This study aims to investigate the impact of gender diversity in top management teams and boards on environmental, social and governance (ESG) performance. The authors propose a corporate social responsibility (CSR) committee as a moderating variable in this relationship, drawing on resource dependence and legitimacy theories. This study is crucial in understanding the dynamics of gender diversity and its impact on ESG performance in the banking sector. Design/methodology/approach The study examines a sample of Islamic and conventional banks from 10 Middle Eastern and North African countries during 2008–2022. Initial analysis was conducted using fixed effects panel regression, whereas the robustness test used the generalized method of movement dynamic system. Findings The findings, which are significant for both conventional and Islamic banks, indicate that female directors are crucial in promoting ESG performance in conventional banks. In contrast, female executives do not appear to contribute significantly. However, for Islamic banks, neither board nor executive gender diversity significantly affects ESG performance. Moreover, the find that the positive moderating role of the CSR committee is significant only for the nexus between board gender diversity and conventional banks’ ESG performance and for the connection between executive gender diversity and Islamic banks’ ESG performance. Originality/value Despite the widespread belief that gender diversity in top management teams is pivotal in promoting ESG performance, empirical studies supporting these claims are scarce, particularly in the banking sector. The study, therefore, brings a novel perspective to this discourse. These findings have the potential to significantly assist stakeholders in evaluating how gender diversity in top management teams influences banks’ sustainability practices, thereby empowering them to make more informed and impactful investment decisions.

Impact of Pay Gap on Innovation Performance: The Moderating Role of Top Management Team Diversity

Impact of Pay Gap on Innovation Performance: The Moderating Role of Top Management Team Diversity

Top Management Team Diversity and Competitive Advantage: An Emirical Investigation of Insurance Companies in Kenya

Top Management Team Diversity and Competitive Advantage: An Emirical Investigation of Insurance Companies in Kenya

The impact of top management team members diversity on corporations’ performance and value: evidence from emerging markets

The study contributes to understanding the impact of top management team (TMT) member diversity on corporations’ performance and value in emerging markets. It examines three dimensions of diversity in TMT: gender, education, and foreign nationalities, providing insights into how these factors influence corporate performance and value. The study’s quantitative analysis of 70 non-financial corporations from Brazil, Egypt, India, Russia, Saudi Arabia, South Africa, and Turkey from 2013 to 2022 using cross-sectional unit analyzes helps establish empirical evidence on the relationship between TMT diversity and corporate performance in emerging markets. Study’s findings can inform corporations in emerging markets about the importance of promoting diversity in their top management teams to improve performance and value. The study found a significant impact of top management team diversity based on education and foreign nationalities but a non-significant impact on gender on some key performance indicators (KPIs). The study can explain the non-significant impact of gender according to shifting the prevailing theory from sexual selection theory to prospect theory. On the other hand, the study believes that the optimal mass of diversification, or the weight of members with diverse backgrounds, determines whether the impact of diversification is positive (it leads to increased creativity, innovation, problem-solving ability, talent attraction and retention, and employee engagement and productivity) or negative (it leads to increased organizational conflict and communication difficulties). If it is less than this mass, the benefits of diversity are limited, but if the mass is greater than it, the harms of diversity are greater than the benefits. The study also highlights the need for future research in the area of diversity in top management and provides a plan outlining steps to enhance diversity in top management teams.

Influence of Strategic Oriention on Diversity of Top Management and Competitive Advantage of Insurance Companies

Whereas strategy literature presents ambiguous findings on the influence of top executives on firm outcomes, there is mixed evidence that several other dynamics can come into play to enhance or downplay this relationship. This study sought to address this gap by interrogating whether strategic orientation would impact the connection between top management team diversity and competitive advantage of insurance companies based in Kenya. 54 companies targeted were subjected to a cross sectional survey and from this, 41 availed a senior executive to complete the research questionnaire presented. Data gathered was subjected to analysis with the aid of statistical software for social sciences and regression analysis applied to test hypotheses. The impact of strategic orientation was tested through the Baron and Kenny approach. The findings revealed that top manager diversity and strategic orientation affected competitive advantage despite not fully accounting for its variability. Additionally,  strategic orientation presented a statistically significant effect and proved to be a moderator in the association between top management team diversity and competitive advantage.  These findings implied that policy makers and practitioners take guidance on the importance of designing teams with diverse members that can front effective strategies for market competitiveness. The results backed the perspectives in the upper echelon and resource advantage view since it established that when teams have diverse members and calculated strategic positions, they have the capability to attain competitive advantage. The study recommended that future studies take into consideration a longitudinal approach that enables observation and analysis of relationship among variables for a considerable duration.

Functional Background Diversity of Top Management Team and Managerial Forecasting Capability

ABSTRACT This study examines whether top management team (TMT) functional background diversity affects managerial forecasting capability. We find that TMTs with more diverse functional backgrounds issue more accurate earnings forecasts. Additional tests reveal that the negative association between TMT functional background diversity and management forecast errors becomes weaker when TMTs work together for a long time, when subgroups are more likely to develop within the team, when CEOs are more powerful, and when team size is larger. By contrast, the reduction in management forecast errors is more significant for functionally diverse TMTs when forecasting difficulty is higher. These findings suggest that TMT functional background diversity plays an important role in managerial forecasting capability. Data Availability: Data are available from the sources cited in the text. JEL Classifications: M14; M41.

Impact of diversity of top management team on firm's green innovation: Evidence from China

AbstractThe diversity of top management team can bring more resources and opportunities to the enterprise and contribute to its green strategy. This research focuses on the relationship between diversity of top management team and green innovation and further identifies internal influencing mechanism. We employ the number of green patents, ratio of green patents, and the ratio of green inventions to describe and measure firm's green innovation. It finds that the diversity of top management team could trigger strategic green innovation rather than substantive green innovation of enterprise. There are positive impacts of diversity of top management team on number of green patents and ratio of green patents. There is no evidence that diversity of top management team promotes the ratio of green inventions. Based on heterogeneity analysis, we further confirm that the results mentioned above only exist in those firms with high energy consumption and high pollution. Meanwhile, this research examines the influencing mechanism and finds that the diversity of top management team stimulates number of green patents and ratio of green patent through reducing tunneling effect and enhancing internal control.

Literature review on gender diversity in top management teams of companies and its relationship with firm performance and audit quality

Literature review on gender diversity in top management teams of companies and its relationship with firm performance and audit quality

The Impact of Gender Diversity in Top Management on Firm Performance

This paper provides a comprehensive systematic literature review of the existing research on the impact of gender diversity in top management team on firm financial and non-financial performance. This paper summarizes the studies on the impact of gender diversity in TMT on performance through a systematic literature review. Firstly, this paper present the theoretical basis used to describe the relationship between them, and highlight the significance of the complexity perspective to address the limitation of measuring firm financial performance intently as a function of gender diversity in top management team from a singular theoretical perspective. Further, this paper review empirical literature on the relationship between gender diversity in top management team and corporate financial and non-financial performance, and discussed both positive and negative impacts in financial performance. Finally, based on the results of literature review, this paper present the conclusion and future research recommendations.

Is the relationship between institutional distance and subsidiary performance moderated by top management team? Evidence from Chinese multinational enterprises

Institutional distance is well-recognised as having a significant influence on MNE subsidiary performance in host countries. However, there is less clarity as to how the institutional distance is managed by top management teams of MNEs. Specifically, it is not known whether the previous work experiences of the top management team (TMT) can moderate how institutional distance impacts subsidiary performance. The purpose of our research is to address the research question, how do different work experiences among the TMT moderate the relationship between institutional distance and subsidiary performance? To empirically answer this question, we use a sample of 6119 Chinese MNE subsidiaries with 34,870 TMT managers. We apply ordinary least square (OLS) regression and bias-corrected and accelerated bootstrap (BCa) to the data. The results indicate that the strength of the negative relationship between institutional distance and MNE subsidiary performance is conditional on the different work experiences of the TMT. We show that the negative relationship between institutional distance and MNE subsidiary performance is strengthened with an increase in expatriates in the TMT who have home country work experience (β = −0.346, p < 0.05) but mitigated with an increase of managers in the TMT who have host country work experience (β = 0.129, p < 0.01). Additionally, the negative relationship between institutional distance and subsidiary performance is weakened by increasing diversity of TMT’s international experience (β = 0.555, p < 0.01). Notably, the TMT’s international experience in weak-institution markets has a more salient mitigating effect on the negative relationship than work experienced gained in strong-institution markets. This study contributes to the integration of TMT perspective into institutional management and has practical implications for the staffing strategy of MNE subsidiaries.

TMT’s Impact on Company Performance: Unraveling the Role of Strategic HRM Choices

Purpose: The article explores the intricate relationship between top management teams (TMTs), strategic HRM, and company performance. It investigates whether TMT attributes influence strategic HRM choices, ultimately contributing to improved company performance. The study introduces mediation models to unravel how two TMT strategic HRM choices mediate the relationship between TMT attributes and company performance. Design/Methodology/Approach: Conducting a nationwide study involving 150 Polish companies, the research collected data through surveys with 150 HR managers and 150 top managers. Statistical methods, including descriptive statistics, correlations, and regression analysis, were employed in the analytical framework to explore the hypothesized relationships. Findings: The study uncovers a positive correlation between TMT attributes and company performance. It identifies TMT emphasis on SHRM and curatorship of HR as pivotal mediators, showing that larger, diverse TMTs are inclined to prioritize gaining a competitive advantage through human resources, and address vulnerability challenges, positively impacting overall company performance. Research Limitations/Implications: Acknowledging limitations in the oversight of organizational processes, particularly translating top managers’ choices into company performance, the article highlights the need for further validation of the curatorship of HR measurement tools, and suggests incorporating objective financial data for comprehensive performance assessments in future research. Originality and Value: The study contributes valuable insights into the complex dynamics impacting company performance, examining key TMT attributes, and introducing the concept of “curatorship of human resources”. The novel perspective, alongside TMT emphasis on SHRM, proves pivotal in positively influencing overall performance, filling a significant gap in HRM literature.

Top management team diversity and adaptive firm performance: the moderating roles of overlapping team tenure and severity of threat

PurposeAlthough strategic scholars have made great effects to exploring the moderating roles of team interaction in explaining the effect of top management team (TMT) diversity, they have adopted seemingly conflicting theoretical perspectives to explain how it works. Drawing on ideas from the threat rigidity theory, the authors integrated these perspectives by proposing a contingency model in which the relationships between TMT diversity and adaptive firm performance depend on the matching between the internal context (i.e. overlapping team tenure) and external context (i.e. severity of threat).Design/methodology/approachThis study sampled 579 Chinese A-share listed companies that have been severely affected by the COVID-19 pandemic, and multilevel linear regression analysis was used to test the hypothesis.FindingsResults provided support for this hypothesis. Specifically, the interaction between TMT age/tenure diversity and overlapping team tenure is significant only when the severity of threat is high, while the interaction between TMT functional diversity and overlapping team tenure is significant only when the severity of threat is low.Originality/valueThe results of this study provide a comprehensive perspective to predict the performance impact of team diversity and contribute to diversity research and practice.

The more diverse, the better? Exploring the moderating role of hospitality top management team diversity on CSR-FP link

While top executives make strategic decisions for corporate social responsibility (CSR), the composition of top management team (TMT) in the relationship between CSR and FP has yet to be explored in the hospitality literature. Building on the upper echelons, human capital, and stakeholder theories, this study focuses on the moderating role of four TMT diversity types, gender, age, industry experience, and tenure, in the CSR-FP relationship. This study found that diversity in TMT age and industry experience positively moderate the CSR-FP relationship, while tenure diversity negatively moderates such relationship and gender diversity is not a significant moderator. This study sheds light on the benefit of a more diverse hospitality firm TMT in terms of CSR, which extends the theoretical discussion about the effect of CSR on FP. Hospitality industry practitioners and relevant stakeholders can be illuminated by the advantages of a more diverse TMT that can efficiently utilize CSR to contribute to FP.

How does gender diversity in top management teams affect carbon disclosure and its quality: Evidence from the technological industry

This study assesses the impact of gender diversity in top management teams on voluntary carbon disclosure and carbon disclosure quality in the technological industry. We consider different senior management positions through a “multiteam system” approach. By crossing the MERIT500 and Carbon Disclosure Project databases, we build a sample of 138 technological firms over the 2014–2020 period. The results of the logistic and ordered logistic models show that gender diversity among top management teams can effectively improve voluntary carbon disclosure and its quality and can eventually contribute to achieving the transition to a low-carbon global economy. Our results confirm that women's participation on boards of directors has a positive impact on voluntary carbon disclosure and its quality. Women CEOs and women in top operational management positively influence voluntary carbon disclosure, whereas board chairwomen have no influence on carbon disclosure and its quality. Reaching a 30 % threshold among top management teams positively impacts voluntary carbon disclosure and its quality. Overall, our results support our “multiteam system” approach and the use of critical mass theory to fully measure the effects of gender diversity among top management teams.

Influence of Gender Diversity, Age, Education, and Work Experience Top Management Team on Intellectual Capital Performance: Empirical Study on Sector Companies Banking in 2021-2022

The aim of this research is to analyze the influence of Gender Diversity, Age, Education and Work Experience on Intellectual Capital Performance. The sample used in this research consisted of 23 companies selected using purposive sampling. This research uses quantitative methods and the research object is banking companies listed on the Indonesian Stock Exchange for the 2021-2022 period. The research method used is Common Effect Model (CEM) panel data which is processed using the Eviews version 12 application. The data used is in the form of annual reports and financial reports for the period 2021-2022. This research uses multiple regression analysis. The variables in this research are Disclosure of Intellectual Capital (Y), Gender Diversity of the Female Top Management Team (X1), Age of the Top Management Team (X2), Education of the Top Management Team (X3) and Work Experience of the Top Management Team (X4). The results of the statistical analysis show that partially the Gender Diversity Top Management Team Female variable has a positive and insignificant effect on Intellectual Capital Performance. The age of the Top Management Team has a negative and significant effect on Intellectual Capital Performance. Then, Top Management Team education has a positive and insignificant effect on Intellectual Capital Performance. Lastly, Top Management Team experience has a negative and insignificant effect on Intellectual Capital Performance.

Top management team career experience heterogeneity, digital transformation, and the corporate green innovation: a moderated mediation analysis

IntroductionDrawing upon upper echelon theory and the resource-based view, this study employs a moderated mediation model to investigate the moderating role and underlying mechanisms of digital transformation in the influence of top management teams (TMT) on corporate green innovation.MethodsOur analysis of panel data from 19,155 Chinese A-share listed companies (2011–2020) demonstrates that TMT career experience heterogeneity has a positive effect on green innovation, a relationship that is further strengthened by digital transformation.ResultsThis study shows the role of digital transformation in amplifying the effects of TMT diversity on green innovation and the crucial role of industry-academia-research collaboration as a mediator. Heterogeneity analysis highlights that non-state-owned enterprises (non-SOEs) show more agility than state-owned enterprises (SOEs) in leveraging heterogeneous TMT to drive green innovation. Conversely, green innovation in SOEs benefits more from digital transformation, which includes both its direct and indirect effects of digital transformation. Enterprises located in non-Yangtze River Economic Belt regions benefit more from digital transformation, demonstrating the importance of a balanced distribution of digital resources.DiscussionThis study provides novel insights into leveraging inclusive leadership and digital capabilities to enhance ecological sustainability. This study underscores the potential of diversified TMTs and digitalization technology integration to catalyze green innovation, which is critical for environmentally responsible transformation.

Top management team diversity impact on financial performance: Evidence from VW Group affiliated firms

Abstract Diversity within top management teams (TMTs) has significant implications for firm financial performance, particularly in dynamic industries like the automotive sector. This paper analyzes the relationship between TMT diversity and financial outcomes in companies associated with the Volkswagen Group, operating in an intensely competitive market marked by technological advancements. This comprehensive paper synthesizes studies investigating the correlation between TMT diversity and financial performance within the automotive domain. Employing quantitative approaches, these studies assess demographic factors such as gender, age, ethnicity, and educational background. The analysis unveils distinct patterns of impact. Gender diversity within TMTs exhibits a positive influence on financial performance, with heightened profitability and increased market value being notable outcomes. Age diversity shows a nuanced trend, with moderate levels enhancing strategic decision-making capabilities and fostering innovation. Increased ethnic diversity within TMTs is associated with elevated innovation and overall firm performance. Furthermore, educational diversity within TMTs is found to bolster firm performance, underscoring its pivotal role in strategic decision-making and innovation. By offering a comprehensive synthesis of TMT diversity’s connection to financial performance within the Volkswagen Group’s context, this paper contributes novel perspectives. The study emphasizes the methodologies utilized, outlines key findings, and underscores the original contributions made by existing research. This study illuminates the profound influence of TMT diversity on shaping strategic decisions and fostering innovation in the automotive sector. Importantly, it highlights the crucial role of TMT diversity in driving positive financial outcomes.