Shareholders and Stakeholders Around the World: The Role of Values, Culture, and Law in Directors’ Decisions

47 Pages Posted: 23 Jun 2019 Last revised: 11 Sep 2019

See all articles by Amir N. Licht

Amir N. Licht

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

Renee B. Adams

University of Oxford; ABFER

Date Written: June 12, 2019

Abstract

This study sets out to examine the relative importance of legal and cultural institutions and personal values in directors’ discretion. We present first evidence on the way personal and institutional factors together guide public company directors in decision-making concerning shareholders and stakeholders. In a sample comprising more than nine hundred directors from over fifty countries of origin, we confirm that directors hold a principled, quasi-ideological stance towards shareholders and stakeholders, called shareholderism. Directors’ shareholderism correlates with personal values, but also with cultural norms that are consistent with entrepreneurship. Among legal factors, only creditor protection exhibits a negative correlation with shareholderism, as theory would suggest, while general legal origin and proxies for shareholder and employee protection are unrelated to it.

Keywords: shareholderism, stakeholders, directors, values, culture, social norms, law, institutions, corporate governance, CSR, entrepreneurship

JEL Classification: K22, M14

Suggested Citation

Licht, Amir N. and Adams, Renée B., Shareholders and Stakeholders Around the World: The Role of Values, Culture, and Law in Directors’ Decisions (June 12, 2019). European Corporate Governance Institute - Law Working Paper No. 459/2019, Available at SSRN: https://ssrn.com/abstract=3407873

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 the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
952-9-9513323 (Fax)

HOME PAGE: http:/www.ecgi.org

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

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