Rules of the Game: Whose Value is Served When the Board Fires the Owners?

12 Pages Posted: 20 Jun 2012

Date Written: June 2012


How does a board of directors decide what is right? The contest over this question is frequently framed as a debate between shareholder value and stakeholder rights, between a utilitarian view of the ethics of corporate governance and a deontological one. This paper uses a case study with special circumstances that allows us to examine in an unusually clear way the conflict between shareholder value and other bases on which a board can act. In the autumn of 2010, the board of Liverpool Football Club sold the company to another investing group against the explicit wishes of the owners. The peculiar circumstances of this case provide insight into the conflict between ethical approaches to board decisions, allowing us to see certain issues more clearly than we can in listed corporations with many shareholders. What the analysis suggests is that the board saw more than one type of utility on which to base its ethical decision, and that one version resonated with perceived duties to stakeholders. This alignment of outcomes of strategic value with duties contrasted with the utility of shareholder value. While there are reasons to be cautious in generalizing, the case further suggests reasons why boards may reject shareholder value, in opposition to mainstream notions of corporate governance, without rejecting utility as a base of their decisions. Further, the partial alignment of duty and utility facilitates a pragmatic decision rather than one based on a priori claims.

Suggested Citation

Nordberg, Donald, Rules of the Game: Whose Value is Served When the Board Fires the Owners? (June 2012). Business Ethics: A European Review, Vol. 21, Issue 3, pp. 298-309, 2012, Available at SSRN: or

Donald Nordberg (Contact Author)

Bournemouth University ( email )

Executive Business Centre, 89 Holdenhurst Road,
Bournemouth, BH8 8EB
United Kingdom


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