40 Pages Posted: 14 Apr 2008 Last revised: 23 Oct 2014
Date Written: August 2, 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.
Keywords: corporate governance, stakeholders, corporate social responsibility, values
JEL Classification: K22, M14
Suggested Citation: 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