Top management team diversity and firm performance: exploring a function of age

Characteristics of top management team and Chinese tax planning nexus: Findings from a fuzzy-set qualitative comparative analysis

A top management team (TMT) has been identified as one of the key factors driving changes in tax planning strategy. Based on upper echelons theory, this study investigates whether configurations of TMT characteristics influence enterprise tax planning strategy by using the fuzzy-set qualitative comparative analysis (fsQCA). Using a panel data of China public companies, we found three configurations conducive to aggressive tax planning and two combinations conducive to low tax planning. Specifically, the level of education, tenure, age, career experience, and size of the top management team affect a firm’s propensity to engage in tax planning. Further, the results show that top management teams are not alike and highlight the differences in how these characteristics combine to impact tax planning.

Top management team (TMT) age diversity and firm performance: the moderating role of the effectiveness of TMT meetings

Purpose

This study aims to investigate the direct effect of directors’ age diversity, and its interaction effect with the effectiveness of TMT meetings on bank performance.

Design/methodology/approach

Quantitative data were extracted from the bank’s annual reports for the six years 2011–2016. Age diversity was calculated using the coefficient of variation, and the bank’s performance was measured as return on assets and return on equity. The frequency of directors’ meetings was used as a proxy for the effectiveness of TMT meetings.

Findings

Based on the hierarchical regression analysis, the results do not support the hypothesis that there is a negative influence between age diversity on performance. However, the results support the hypothesis that age diversity has a positive effect on performance because of the high effectiveness of TMT meetings.

Research limitations/implications

The limitations of the study include the use of only samples of the banks registered with Bank Indonesia. The subsequent research could use cross-country bank samples. In addition, the research uses age-related diversity variables only. Therefore, further research could consider other types of diversity such as education, functional or tenure. Furthermore, this study is limited to the effectiveness of the director (TMT) meetings as the only moderating variable. Further research could improve on this by including other moderating variables.

Practical implications

The findings of this study indicate that the existence of age diversity in TMT will aid bank governance if it is accompanied by effective meetings among groups of directors of varying ages. This age composition of directors will make meetings more effective as rich information for strategic decisions will be generated from different points of view because of the wide spectrum of age categories, and hence, there will be a positive impact on bank performance.

Social implications

This study indicates that effective meetings of TMT groups of different ages will minimize the rise of “self-esteem”. Therefore, they will benefit the creation of a better quality relationship among TMT individuals. Accordingly, TMT within a company will have more opportunities to discuss in providing bright ideas for the company on how to innovate and create a new strategy to improve its performance.

Originality/value

This study, being the first to explore the effectiveness of TMT meetings to bank performance in the contexts of directors’ age diversity, contributes to the literature in this area, and especially to the body of knowledge about companies implementing a two-tier governance system.

Manager’s Age, Sustainable Entrepreneurial Orientation and Sustainable Performance: A Conceptual Outlook

Scholars have investigated the direct linkage between manager’s age and sustainable corporate performance, however, the mixed results and conflicting findings on the nature of the relationship demand further explanation through the missing constructs. Therefore, the purpose of this paper is to examine the mediating role of sustainable entrepreneurial orientation in the manager’s age and sustainable performance. This study develops a conceptual link by using a dynamic capabilities approach and upper echelon perspective, indicating that younger managers can adopt a more holistic approach towards sustainable practices which can enhance the environmental, social and economic performance of firms. This implies that the relationship between manager’s age and sustainable performance can be explained through sustainable entrepreneurial orientation (SEO) which can play a key role in setting organizational direction towards sustainable development and achieving sustainable business performance. This study contributes to the literature by examining the role of SEO in the relationship between the manager’s age and sustainable performance. This research will help practitioners recognize the importance of minimizing environmental and social problems generating due to organizational production activities. This will lead to profit generation as well as value creation for nature and the local community.

Leadership and decision-making: Top management team age demographic and environmental strategy

This research examines the characteristics of the age demographic of a top management team (TMT) as drivers of a firm's environmental management (EM) strategy comprising compliance-only and beyond-compliance initiatives. Using a matched sample of publicly listed firms in Kinder, Lydenberg, and Domini and Bloomberg, panel data regression techniques on a unique dataset of 3,251 firm-year observations suggest that a link does exist. Driven by a desire for legacy and a preference for risk-averse decisions, aging TMTs will support beyond-compliance initiatives. On the other hand, age diversity is expected to enhance the innovative potential of a TMT for solving pressing compliance-related environmental issues. The study finds that aging TMTs support beyond-compliance as compared to compliance-only EM strategies. TMT age diversity, though helpful in developing compliance-only initiatives, is not instrumental in driving beyond-compliance initiatives. The study highlights the challenges in developing a comprehensive EM strategy suggesting paths for future research.