TMT experience and corporate social (ir)responsibility: the moderating effects of faultlines

Abstract

Purpose The purpose of this study is to examine how the experience of the top management team (TMT), such as industrial experience and functional experience heterogeneity, affect corporate social performance (CSP) and whether TMT faultlines act as a moderator. Design/methodology/approach To examine the effect of TMT experience on CSP, this study uses upper echelons theory as theoretical background, and data are selected from 212 Chinese high-polluting companies with A-shares from 2012 to 2016. The dependent variable is lagged by one year from 2013 to 2017. Findings Industrial experience both positively influenced CSR and negatively influenced corporate social irresponsibility. Functional experience heterogeneity had an inverted U-shaped effect on responsible behaviors and a U-shaped effect on irresponsible behaviors. Meanwhile, TMT faultlines played a moderating roles in the relationship between TMT experience and CSP, in which faultlines reinforces the non-linear relationship between functional experience heterogeneity and CSP. Research limitations/implications The existence of impact paths between TMT experience and corporate social performances must still be examined. Other moderators need to be verified. Practical implications The important ways to promote more corporate responsible behavior and reduce irresponsible corporate behavior is to choose the right team members. During team formation, it is important to have experience in related industries and select team members with different functional experiences. Companies can consider hiring executives who tend to work together and have relevant experience, which can reduce the time cost of unnecessary conflicts. Originality/value This study combined the upper echelons theory with some attention perspectives to study the impacts of TMT experience on CSP.