Does Inclusion of CIO in Top Management Team Impact Firm Performance? Evidence from a Long-Term Event Analysis

Inclusion of chief information officers (CIOs) in top management teams (TMTs) increases the functional and knowledge diversity of the teams, and elevates the role of IT in strategic business decisions. Considering that firms are increasingly relying on IT for operational efficiency and competitive advantage, TMTs with IT diversity can be expected to have superior performance compared to those without. While many studies have argued conceptually the importance of CIOs membership in TMTs, very few studies examined the performance effects of this membership. The goal of this study is to investigate this relationship. Moreover, we consider contingency factors that may have an effect on the focal relationship. Using firm-level secondary data and long-term event study methodology, we show that inclusion of CIO in TMT has a significant positive effect on firm performance, and this positive effect is larger for firms in dynamic environments and during the more recent years.