Upper Echelons Nationality Diversity and Compensation: Implications for Firm Performance

Upper echelons have become increasingly multinational over the past few decades. This study investigates the impact of the growth in upper echelons internationalization on firm strategy and performance. We suggest that the increased complexity resulting from firm internationalization requires an alignment between top management team and board composition and compensation. Results from empirical tests on a sample of Swiss publicly listed companies show that firms manage the additional complexity of internationalization by increasing the degree of nationality diversity of top management teams and boards. Moreover, matching executive composition and compensation positively influences firm performance.