Top management team meetings and firm performance

Abstract

Purpose How do shareholders know if corporate managers are doing their jobs? This paper aims to propose using top management team meetings as a measure of the behavior of company managers. More meetings may indicate effective effort by top management to enhance company performance. Alternatively, more meetings may reflect procrastination and decision paralysis. Design/methodology/approach Using top management team meeting data publicly disclosed by Indonesian companies during 2010–2017, this study tests for these hypothesized relationships between top management team meeting frequency and firm performance. Findings This study found that top management team meetings are positively related to firm performance, indicating that more meetings do represent more effective effort by top management teams. Further analysis shows that only firms that consistently hold more meetings than their peers perform better, particularly during periods of poor performance. Originality/value This study highlights top management team meetings as a valid signal of management effort and suggests there should be louder calls for disclosure of these types of executive performance metrics around the world.

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

“…Furthermore, previous literature explained that more meetings reflected more effective efforts (e.g. focused communication, constructive dialogue and quality decision-making), to improve company performances (Harymawan et al , 2020).…”

“…According to Al-Musali and Ku Ismail (2015) and Harymawan et al (2020), the frequency of directors (TMT) meetings was measured as a proxy for TMT meeting effectiveness. This proposition was based on the idea that meeting frequency reduced the negative effect of TMT diversity.…”

“…However, this diversity is still expected to reduce these behaviours, because of high frequency of meetings, which in turn leads to the emergence of good individual potentials. Harymawan et al (2020) indicated that TMT meetings were positively related to company performance, while further suggesting that more TMT conferences represented higher effective efforts. The study of Bagire et al (2015) also explained that meetings provided a forum for decision-making, communication, motivation, interpersonal relationships and dispute resolution.…”

“…Several studies with secondary data samples further used the number of TMT meetings in one year as a measure of effectiveness (Harymawan et al , 2020; Al-Musali and Ku Ismail (2015). Harymawan et al (2020) explained that more TMT meetings were associated with higher company performance, where more conferences reflected greater effective efforts (for example, through focused communication, constructive dialogue and quality decision-making).…”

“…Furthermore, this study focuses on the effectiveness of TMT meetings as a moderating variable, because of being an important part of corporate governance (Al-Musali and Ku Ismail, 2015). Previous literature also showed that these meetings improve performance (Harymawan et al , 2020), and conceptually reduce the negative impact arising from TMT diversity (Al-Musali and Ku Ismail, 2015).…”