Director Networks, Stakeholder Orientation, and the Objective of the Firm

74 Pages Posted: 29 Dec 2016 Last revised: 22 Jul 2019

See all articles by Omesh Kini

Omesh Kini

Georgia State University

Sangho Lee

California State Polytechnic University, Pomona

Mo Shen

Auburn University

Date Written: July 22, 2019

Abstract

We exploit the network of director interlocks to examine the influence of the board’s stakeholder orientation on the firm’s disposition towards its stakeholders, director selection, and valuation. Using measures of stakeholder orientation of the board and the firm, we find that the board’s stakeholder orientation subsequently affects the firm’s stakeholder orientation. Further, prospective directors are more likely to be chosen if they can increase the alignment of stakeholder orientation between the board and the firm. Finally, the divergence in stakeholder orientation between the board and the firm reduces firm value, especially when the board’s advisory role is more critical.

Keywords: Stakeholder Orientation, Director Networks, Board Advice, Director Appointments, Firm Value

JEL Classification: G31, G34, L25

Suggested Citation

Kini, Omesh and Lee, Sangho and Shen, Mo, Director Networks, Stakeholder Orientation, and the Objective of the Firm (July 22, 2019). Available at SSRN: https://ssrn.com/abstract=2891188 or http://dx.doi.org/10.2139/ssrn.2891188

Omesh Kini (Contact Author)

Georgia State University ( email )

University Plaza
Atlanta, GA 30303-3083
United States
404-651-2656 (Phone)

Sangho Lee

California State Polytechnic University, Pomona ( email )

3801 West Temple Avenue
College of Business Administration
Pomona, CA 91768
United States

Mo Shen

Auburn University ( email )

Auburn, AL 36849
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
120
Abstract Views
941
rank
283,976
PlumX Metrics