Shareholderism: Board Members' Values and the Shareholder-Stakeholder Dilemma

40 Pages Posted: 14 Apr 2008 Last revised: 23 Oct 2014

Renee B. Adams

University of New South Wales, Department of Banking and Finance; ECGI; FIRN; ABFER

Amir N. Licht

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law; European Corporate Governance Institute (ECGI)

Lilach Sagiv

Hebrew University of Jerusalem - Jerusalem School of Business Administration

Date Written: August 2, 2008

Abstract

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.

Keywords: corporate governance, stakeholders, corporate social responsibility, values

JEL Classification: K22, M14

Suggested Citation

Adams, Renee B. and Licht, Amir N. and Sagiv, Lilach, Shareholderism: Board Members' Values and the Shareholder-Stakeholder Dilemma (August 2, 2008). ECGI - Finance Working Paper No. 204/2008. Available at SSRN: https://ssrn.com/abstract=1118664 or http://dx.doi.org/10.2139/ssrn.1118664

Renée B. Adams

University of New South Wales, Department of Banking and Finance ( email )

Sydney, NSW 2052
Australia
+61(2)93854280 (Phone)

ECGI

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

FIRN

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

ABFER

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Amir N. Licht (Contact Author)

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law ( email )

P.O. Box 167
Herzliya, 46150
Israel
972-9-952-7332 (Phone)
952-9-9513323 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
952-9-9513323 (Fax)

HOME PAGE: http:/www.ecgi.org

Lilach Sagiv

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel
972 2 652 1841 (Phone)

Paper statistics

Downloads
488
Rank
44,670
Abstract Views
2,710