| dc.description.abstract | The purpose of this study is to examine the relationship between top management team (TMT) diversity and firm performance. We also discuss the moderating role of CEO duality and family control, which are proxy for the firm’s adoption of corporate governance system, on the relationship between TMT diversity and firm performance. We analyze data from 103 companies whose assets are up to NT$ 200 billion on 2010.
In this study, we definite seven TMT diversity variables from corporate annual report: gender, tenure, total shareholding, educational area, educational level, educational background, and the number of current post held concurrently in other companies. Our results reveal an inverted U-shape curvilinear relationship between five diversity variables (gender, total shareholding, educational area, educational level, and the number of current post held concurrently in other companies) and firm performance, and suggest the existence of optimal TMT diversity.
We find that CEO duality has a negative moderating effect on the relationship between TMT diversity and firm performance. When CEO and board chairperson are held simultaneously by one person, he or she is powerful. CEO duality has a negative effect on building trust within TMT members and then they are unwilling to exchange information. Family control, however, has no significant effect on the relationship between TMT diversity and firm performance. Finally, we give some suggestions on human resource management practices and the use of the model of corporate governance.
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