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

40 Pages Posted: 26 Jul 2009 Last revised: 18 Oct 2014

See all articles by Renee B. Adams

Renee B. Adams

University of Oxford; 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: July 24, 2009

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, Renée B. and Licht, Amir N. and Sagiv, Lilach, Shareholderism: Board Members’ Values and the Shareholder-Stakeholder Dilemma (July 24, 2009). CELS 2009 4th Annual Conference on Empirical Legal Studies Paper. Available at SSRN: https://ssrn.com/abstract=1438396 or http://dx.doi.org/10.2139/ssrn.1438396

Renée B. Adams

University of Oxford ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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)

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