Shareholderism: Board Members' Values and the Shareholder-Stakeholder Dilemma
Renee B. Adams
University of New South Wales; Financial Research Network (FIRN); European Corporate Governance Institute (ECGI)
Amir N. Licht
Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law; European Corporate Governance Institute (ECGI)
Hebrew University of Jerusalem - Jerusalem School of Business Administration
August 2, 2008
ECGI - Finance Working Paper No. 204/2008
This study investigates how personal values may affect strategic decisions of board members in dilemmas involving shareholders and other stakeholders. In a survey of the entire population of directors and CEOs in all public corporations in one country, we use vignettes that are based on seminal court cases to identify a general factor of shareholderism (vs. stakeholderism). Directors and CEOs exhibit greater shareholderism the more they endorse entrepreneurial values - namely, higher achievement, power, and self-direction values and lower universalism, benevolence, and conformity values. Employee representative directors exhibit more stakeholderist stances, but in most cases side with shareholders. Finally, directors in more profitable firms exhibit stronger shareholderism.
Number of Pages in PDF File: 40
Keywords: corporate governance, stakeholders, corporate social responsibility, values
JEL Classification: K22, M14
Date posted: April 14, 2008 ; Last revised: October 23, 2014
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