Management Team Characteristics Research Articles

Which Top Management Team Characteristics Drive a Firm’s Tax Aggressiveness?

Which Top Management Team Characteristics Drive a Firm’s Tax Aggressiveness?

Connecting Top Management Team (TMT) Characteristics to Earning Management: Sample Companies in Saudi Arabia

This study investigates whether specific characteristics of a firm's top management team (TMT) affect the company's earnings management (EM) in Saudi Arabia. The data was collected from 163 companies listed in Saudi Arabia from 2017 to 2021. The TMT characteristics were measured using two different criteria: the academic qualifications and the management expertise of the team. Two models were used to analyze the data: the modified Jones model (1995) was used to measure accrual management, and the Kothari model (2006) was used to estimate accrual discretionary. The research findings revealed that TMT characteristics do not significantly impact EM in Saudi Arabia. According to the Kothari model approach (2006), both the academic qualifications and the management expertise did not influence EM. However, when we followed the Jones model approach (1995), the results showed that management expertise significantly and positively impacts EM. On the other hand, the academic qualifications do not seem to significantly impact EM.

A Study on the Relationship between Top Management Team Characteristics and Firm Performance from a Team Life Cycle Perspective

As the most important human resource of an enterprise, top management has received much attention from many researchers, and the top echelon theory proposed by Hambrick and Mason (1984) has laid a theoretical cornerstone for the study of the relationship between the characteristics of the top management team and the performance of the enterprise.Existing studies have focused on the impact of top management team characteristics on firm performance by using top management team demographic characteristics as a proxy variable for measuring top management team characteristics. However, from empirical studies, the relationship between top management team characteristics and firm performance has yet to achieve consistent conclusions. This paper reviews the research lineage of the relationship between top management team characteristics and corporate performance, analyzes the limitations of the existing research, and proposes future research directions in this field with a new perspective on the team life cycle.

The Influence of Firm’s Top Management Team Characteristics on Big Data Analytics Capability and Competitive Advantage

ABSTRACT This study examines the influence of four critical top management team (TMT) characteristics: (i) shared mindset, (ii) education, (iii) social capital, and (iv) the presence of a chief data officer on a firm’s ability to orchestrate big data analytic capabilities to achieve competitive advantage. Our study’s results indicate that education and social capital of the TMT have a significant positive impact on the firm’s ability to orchestrate big data analytics capabilities for competitive advantage.

Effect of Top Management Team Characteristics and Green Innovation on Firm Performance in Indonesia: Role of Carbon Emission Disclosure

The purpose of this study is to investigate whether top management team (TMT) characteristics and green innovation (GI) affect firm performance, and if so, whether the effect is mediated by carbon emission disclosure (CED). This quantitative study employs the partial least square structural equation modeling (PLS-SEM) to test the hypotheses. The data were collected from the high-profile companies listed in the Indonesia Stock Exchange (IDX) for the 2015 - 2019 period. A mediating research framework was developed to explain the association among constructs. Using agency theory and sustainability theory (triple bottom line), the results show the following findings. First, TMT characteristics positively affect firm performance. Second, GI positively affects on firm performance. Third, CED partially mediates the effect of TMT characteristics on firm performance. Fourth, CED partially mediates the effect of GI on firm performance. The current study addresses the existing research gaps and debates in the previous studies in term of proposing a more comprehensive framework by adding CED as a mediating variable. This study also builds a new dataset and focuses on environmental issues in the Indonesian research setting as an emerging country and a two-tier governance system adopter.

The Impact of Executive Green Incentives and Top Management Team Characteristics on Corporate Value in China: The Mediating Role of Environment, Social and Government Performance

The pursuit of economic growth remains a consistent focal point in the development of nations. However, this heightened emphasis on economic expansion has precipitated a global environmental crisis (e.g., climate change, air pollution, etc.). Numerous countries have announced targets and commitments aimed at mitigating carbon emissions. Enterprises are the mainstay of economic development. In the context of low-carbon development, the current challenge faced by enterprises lies in transforming their business philosophy and value orientation to achieve a harmonious integration of economic growth and carbon emission reduction. Consequently, within the framework of sustainable development, the stability and developmental trajectory of enterprise value have emerged as prominent research subjects in recent years. As the concept of sustainable development gradually permeates society, there has been widespread attention from various sectors toward evaluating corporate environmental, social and governance (ESG) performance. This study focuses on listed companies in China’s manufacturing industry as the research subject. Drawing upon the principal–agent theory, stakeholder theory, upper echelon theory and tournament incentive theory, we aim to validate the feasibility of selecting a top management team that aligns with the characteristics of sustainable development during enterprise transition. By constructing a structural equation model and conducting hypothesis testing under the premise of limited rationality among top management, we explore how green incentives provided to top management impact both enterprise transition toward sustainability and enhancement of corporate value. Additionally, we investigate how demographic characteristics of top management contribute to amplifying the role of green incentives on corporate value. The results show that executive green incentives and top management team characteristics positively impact the corporate environment, social and government (ESG) performance and that implementing environment, social and government aspects can improve corporate value. Upon further analysis, it is found that there is a moderate degree of coupling between top management team characteristics and executive green incentives in promoting better ESG performance and enhancing corporate value. This study provides empirical evidence of the favorable economic outcomes associated with environmental, social and governance (ESG) performance, which offers valuable insights for companies to consider when selecting and incentivizing executives, as well as for government departments aiming to enhance environmental, social and governance (ESG) incentive policies.

How do top management team characteristics affect digital orientation? Exploring the internal driving forces of firm digitalization

The top management team (TMT) plays a key role in the process of the firm digital transformation. However, few studies have focused on the impact of TMT characteristics on the digital orientation of firms. In this paper, we simultaneously explore the impact of the dispersion, aggregation, and background characteristics of TMT on the digital orientation of firms. Based on the upper echelons theory and strategic orientation theory, we propose that the diversity and average education level of TMT positively impact firms' digital orientation. The average age and tenure of TMT have a negative impact on the digital orientation of firms. The overseas and financial backgrounds of TMT members have a positive impact on the digital orientation of firms. Our hypothesis was tested using large-scale longitudinal data and computer-aided text analysis methods from Chinese listed companies. This paper provides useful supplements to early research on digital driving factors and digital orientation in emerging economies, and also provides more universal suggestions for digital practices in firms.

Industry and Regional Peer Effects in Corporate Digital Transformation: The Moderating Effects of TMT Characteristics

Currently, the research on corporate digital transformation is mainly explored from the perspective of independent decision-making, but pays less attention to the interactive impact among peer firms. Taking the listed equipment manufacturing enterprises in China as its research sample, this paper uses theoretical analysis and empirical tests to test the impact of peer effect in corporate digital transformation and the moderating effect of top management team (TMT) characteristics. The results show that there are industry peer effects and regional peer effects in corporate digital transformation in which TMT characteristics play a moderating effect. Furthermore, the higher the proportion of females, the younger the average age, the higher the average education, and the longer the average tenure in TMT, the more significant the positive impact of industry peer effect and regional peer effect in corporate digital transformation. The above conclusions remain valid when using change variables, Tobit tests, lag period tests, and IV methods for robustness tests. Further analysis of the results shows that there is a non-linear impact between digital transformation and green technological innovation, and there are multiple mediating effects among industry and regional peer effects, digital transformation, R&D, and green technological innovation. In addition, it is necessary to further examine the social network peer effect in corporate digital transformation as well as the mechanism and economic consequences of peer effect in the future. These findings contribute to a more comprehensive understanding of the driving factors that affect the digital transformation of equipment manufacturing enterprises in China and provide new evidence and theoretical contributions for enterprises to enhance the efficiency of digital transformation and strengthen the construction of a TMT.

Top management team characteristics, technological innovation and firm's greenwashing: Evidence from China's heavy-polluting industries

Greenwashing has become an important strategy for firms to cope with the huge pressure brought by environmental sustainability and win environmental legitimacy. Based on the upper echelon theory and legitimacy theory, this study uses the grounded theory research method to develop the scale of firm's degree of greenwashing specialized with Chinese characteristics, and empirically tests the relationships among top management team (TMT) characteristics, technological innovation, and firm's greenwashing. The results show that TMT education level has a significantly negative effect on firm's greenwashing, while TMT functional background diversity has a significantly positive effect on firm's greenwashing. Technological innovation has a significantly negative impact on firm's greenwashing, and significantly moderates the relationships between TMT age and firm's greenwashing and between TMT functional background diversity and firm's greenwashing, respectively. Our findings provide references for managers and policy makers to understand the influence of TMT characteristics on firm's greenwashing as well as the effective weakening effect of technological innovation on firm's greenwashing.

The Impact of Top Management Team Characteristics on the Risk Taking of Chinese Private Construction Enterprises

Private construction businesses have grown quickly, greatly boosting China’s economic growth; nonetheless, these businesses suffer tremendous developmental uncertainty, particularly when compared to larger state-owned businesses. The traits of the top management team (TMT) may have a direct impact on how risk-taking and decision-making behaviors are exhibited by businesses, according to earlier studies. The majority of private construction companies in China are family businesses with family members making up the majority of their top executives. As a result, these companies are vulnerable to family centralization, which will definitely boost their risk-taking level. This study used a sample of private listed companies in China’s construction industry from 2009 to 2019 to explore the impact of CEO traits on the risk-taking degree of enterprises. The findings show that a higher percentage of top female managers and a higher average rate of TMT member both lower the level of risk taking in private construction businesses. The level of risk taking, however, is positively impacted by the top management’s higher average education level. The average tenure and overseas experience of TMTs and the degree of risk taking in private construction enterprises are not significantly correlated. Additionally, the degree of risk taking in private construction firms can vary depending on the qualities of the senior management team.

Non-financial reporting in non-profit organisations: the case of risk and governance disclosures in UK higher education institutions

ABSTRACT This paper investigates non-financial reporting in non-profit organisations. Specifically, it examines the extent to which UK higher education institutions (HEIs) make voluntary disclosures relating to risk management practices, and investigates whether composite governance quality index and senior management team characteristics can influence such risk disclosures. Using a sample of UK HEIs over a number of years and drawing insights from neo-institutional theory, our findings are three-fold. First, our baseline findings contribute to the literature by showing that the level of risk disclosure among HEIs in the UK is relatively low, especially when compared to the findings of prior studies that have been conducted on similar-sized publicly traded corporations. Second, we contribute to the literature by providing timely evidence on the impact of governance quality on risk disclosure. In particular, our evidence contributes to the existing literature by demonstrating that better-governed HEIs tend to engage in higher risk disclosures than their poorly-governed counterparts. Finally, our study contributes to the extant literature by providing new evidence that offers support for the “shared” governance model among UK HEIs. Specifically, our findings show that the positive governance quality–risk disclosure relationship is moderated/explained largely by the characteristics of the senior management team. Our findings are robust to controlling for endogeneities and alternative estimation techniques, with major implications for non-financial reporting. HIGHLIGHTS This paper examines non-financial reporting (NFR) in non-profit organisations, with specific focus on risk disclosures by UK higher education institutions (HEIs) We examine the effect of UK HEIs' governance quality on the level of risk disclosures; We investigate whether management team characteristics moderate the governance quality-risk disclosures nexus in UK HEIs We find that better-governed UK HEIs tend to engage in higher levels of risk disclosures We show further that the positive governance quality-risk disclosure relationship is moderated/explained largely by the characteristics of the senior management team

Nexus between environmental disclosures and top management team characteristics: a systematic review.

Voluntary nature of sustainability disclosures in most of the countries shifts focus of academicians towards discretion of top executives as a major determining force for firms to make their operations environmentally and socially sustainable. Based on two decade literature on the topic available at Scopus database this study aims to present a comprehensive knowledge map of intellectual structure on the relationship of top management characteristics on sustainability spending and disclosures. A bibliometric systematic review of 164 articles from 2002 to 2022 has been conducted with the help of VOSviewer and identified most influential journals, articles, and the countries whose corresponding authors have contributed in the field and influential research clusters in the literature. These research clusters are first, red cluster with 94 articles has discussed the upper echelon's personal and professional characteristics in relation to sustainability disclosures. Second, green cluster with 60 articles has discussed particularly the gender diversity in top executives and board of directors in relationship with sustainability disclosures. Third, blue cluster with 10 articles has elaborated the influence of independent directors on sustainability disclosures of corporate sector. The findings of this study will particularly help the regulators to make regulations regarding critical mass of female on boards and top management, family-owned firms, and politically connected directors. Moreover it will also help consultants, analysts, and investment bankers to differentiate firms with pressure-resistant and pressure-sensitive institutional investors. From this review shareholders can be very much clear in the selection of their representatives and ultimately the appointment of top management team. This study also provides an insight for future direction so that unexplored dimension of this field may further be discovered by upcoming researchers.

Top Management Team Characteristics, Overconfidence, and Financial Asset Allocation

Top Management Team Characteristics, Overconfidence, and Financial Asset Allocation

Reporting on sustainable development: Configurational effects of top management team and corporate characteristics on environmental information disclosure

AbstractAlthough widely explored in many studies, how and why combined top management team (TMT) and corporate characteristics affect environmental information disclosures (EID) are still lacking clarity. This study uses both fuzzy‐set qualitative comparative analysis and necessary condition analysis to reconcile the inconclusive results concerning the configurational effects of these characteristics on EID and to validate the robustness. From a sample of listed construction engineering corporates during the 2014–2018 period, the high EID level is associated with several complex configurations that contain the core characteristics such as corporate ownership and size, whereas the low EID level is related to the configurations including TMT salary and corporate profitability. The findings support the four tenets of equifinality, asymmetry, complexity, and causal asymmetry in complexity theory. Our results capture the complex non‐linear effects of TMT and corporate characteristics and shed new light on environmental disclosure management for corporate sustainable development.

Is Heterogeneity Better? The Impact of Top Management Team Characteristics on Enterprise Innovation Performance.

Although the importance of the top management team’s characteristics has attracted research attention, its influence remains undetermined. This paper considers the influence of top management team characteristics’ heterogeneity on GEM-listed enterprises’ innovation performance. From the perspective of optimizing top management team human capital and improving enterprise innovation performance, this study analyzes 634 GEM-listed enterprises via regression analysis. The results show that the effect of shallow-factor heterogeneity of the top management team on enterprise innovation performance is not significant, but deep-factor heterogeneity has a negative effect. These findings indicate that deep-factor heterogeneity is more important than shallow-factor heterogeneity and is subject to closer attention. If a GEM-listed enterprise wants to set up a strong top management team that contributes to the improvement of enterprise innovation performance, it must examine the consistency of each member’s educational background and extend their tenure as long as possible without considering the gender ratio or age structure of the team.

Burden or Blessing? CEO Early-Life Adversity Experience and Firm Internationalization Performance.

Firm internationalization is a great challenge that needs a strong leader because of the uncertainty involved. Previous research has examined the antecedents of firm internationalization from the perspective of upper echelons theory, including chief executive officer (CEO) or top management team (TMT) characteristics, yet little research has examined the role of CEO early-life adversity experiences. Based on the imprinting theory and upper echelons theory, this study explores the relationship between CEO early-life adversity experience and firm internationalization. Using data from Chinese listed companies during the period 2007–2017, we demonstrate that CEO early-life adversity experiences have a significantly positive effect on firm internationalization; the effect is stronger when the CEO with early-life adversity has a higher level of organization discretion and institutional discretion. The findings are robust to a battery of alternative variable definitions and estimation methods. We contribute to upper echelons theory and the research on internationalization antecedents by showing that CEO early-life adversity has a positive effect on firm internationalization. The findings suggest boards aspiring to expand internationally place weight on candidates’ early-life experiences while selecting and hiring CEOs and confer them managerial discretion to better play their strength after CEO’s appointment decision is made.

Chair–CEO demographic dissimilarities and firm internationalization

PurposeThe purpose of this paper is to investigate the relationship between chair–chief executive officer (CEO) demographic dissimilarities and firm internationalization.Design/methodology/approachThe pooled ordinary least squares regression is used on a sample of listed firms in Malaysia from 2013 to 2017. This study considers three demographic dissimilarities between the chair and CEO, i.e. differences in age, educational background and nationality.FindingsThe results reveal that demographic dissimilarities between the chair and CEO, notably differences in nationality, may result in conflicting cognitive styles, which in turn may impede the firms’ ability to expand internationally, as compared to differences in age and educational background. The findings demonstrate the deleterious effects of demographic dissimilarity between these two individuals in the highest echelons on the firms’ internationalization strategy due to poor communication and lack of ability to cooperate when dissatisfaction and conflicts intensify between these corporate elites.Originality/valueTo the best of the author’s knowledge, this paper makes the first attempt to examine the influence of chair–CEO demographic dissimilarities on firm internationalization. Previous studies examining firms’ internationalization strategy, for the most part, restricted their scope to either the board members or top management team characteristics, but had largely overlooked the nexus between nonexecutive and executive directors through the chair and CEO. A focus on the demographic dissimilarities between the co-leaders of the firm is essential to improve the understanding of the collaboration and rivalry between them, which may affect board effectiveness and firm internationalization.

Influence of Senior Executives Characteristics on Corporate Environmental Disclosures: A Bibliometric Analysis

This study aims to synthesize the literature on the top management team (TMT) characteristics influence on environmental disclosures of public organizations and identify recent trends, key themes, influential journals, and authors. Our study recruited 88 research articles on the relationship of TMT characteristics and environmental disclosures from 54 academic journals published from 2010 to 2021 for bibliometric analysis. Our study has identified three influential streams: (1) Role of Politically connections of TMT, good governance in environmental disclosures; (2) Significance of environmental disclosures and performance; and (3) institutional investors and environmental disclosures. Thematic map classifies the TMT characteristics and environmental disclosures relationship themes into four categories: Niche theme (e.g., financial expertise, CFO characteristics, CEO tenure, and board backgrounds); motor themes (e.g., environmental sustainability and climate change); emerging/declining themes (e.g., Environmental disclosure, managerial ownership, and CEO tenure); and basic/transversal themes (e.g., CEO characteristics, upper echelon theory, corporate governance). This study assists academicians, policymakers, managers, and consultants in the corporate sector to understand the role of different dimensions of TMT characteristics regarding environmental disclosures. Our study concludes with important practical implications and future research directions.

Effects of Top Management Team Characteristics on Patent Strategic Change and Firm Performance.

Patent strategy is increasingly recognized as a vital contributor in promoting core competitiveness of an enterprise. A top management team (TMT) has been indicated as one of the key factors driving changes in patent strategy. Based on upper echelons theory, this study examines how TMT characteristics, including, team diversity, emotional intelligence, and safety climate, influence enterprise patent strategic change and, hence, the business outcome. The data from 930 top managers in 228 enterprises showed that the changes in patent strategies are significantly influenced by the characteristics of top managers. These aforementioned internal TMT factors have diverse effects on the speed and scope of the enterprise patent strategic change, which in turn affects firm performance in a positive and negative way, respectively.

Top management team characteristics and digital innovation: Exploring digital knowledge and TMT interfaces

On their journey toward digital transformation, industrial firms need to embrace digital innovation. The top management team (TMT) is expected to set the course for digital innovation, which is a challenging endeavour given the novel and cross-functional nature of digital innovation. We draw on role theory to make sense of emerging role requirements for the TMT and combine this view with upper echelon theory to hypothesize on the specific TMT characteristics that are needed for digital innovation. We first theorize that firms could benefit from TMT digital knowledge. Second, we argue that the effective utilization of TMT digital knowledge can be fostered at internal TMT interfaces, such as between the chief executive officer (CEO), respectively a chief digital officer (CDO), and other top managers. Finally, we consider the TMT hierarchical structure as a contextual factor in the stimulation of TMT integration processes by integrative CEOs and CDOs. We employ panel data regressions to a longitudinal dataset of US industrial firms and find a positive relation between TMT digital knowledge and digital innovation, on average. We additionally find evidence for the integrative roles of CEOs and CDOs. However, our findings also indicate that the CDO's integrating role can be hampered by a strong hierarchical structure in the TMT.