Changes in top management team strategies caused by the external financial environment

Purpose - The purpose of this paper is to analyse whether the onset of the financial crisis caused changes in the influence of top management team (TMT) on corporate results. Design/methodology/approach - The sample is comprised of the list of S&P 500 Index firms between 2002 and 2008. The study uses a longitudinal panel methodology applying a two-step GMM estimator system. This approach addresses potential unobserved heterogeneity, simultaneity, and dynamic endogeneity. Findings - The primary results reveal that the onset of the financial crisis stimulated those TMTs with large teams and a high frequency of meetings to improve corporate performance, without leading to a reduction in corporate risk taking. Originality/value - This study reveals that different environmental conditions call for different behaviour from TMTs to fulfil their responsibilities. This study also suggests changes in normative and voluntary guidelines for improving the quality of the TMT's work.