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

49 Pages Posted: 19 Jan 2021 Last revised: 10 Feb 2022

See all articles by Amir N. Licht

Amir N. Licht

Reichman University; European Corporate Governance Institute (ECGI)

Renee B. Adams

University of Oxford

Date Written: December 3, 2021

Abstract

We present evidence on the way personal and institutional factors could together guide public company directors in decision-making concerning shareholders and stakeholders. In a sample comprising more than nine hundred directors originating from over fifty countries and serving in firms from twenty three countries, we confirm that directors around the world hold a principled, quasi-ideological stance towards shareholders and stakeholders, called shareholderism, on which they vary in line with their personal values. We theorize and find that in addition to personal values, directors’ shareholderism level associates with cultural norms that are conducive to entrepreneurship. Among legal factors, only creditor protection exhibits a negative correlation with shareholderism, 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, ESG, 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 (December 3, 2021). LawFin Working Paper No. 13, Available at SSRN: https://ssrn.com/abstract=3766934 or http://dx.doi.org/10.2139/ssrn.3766934

Amir N. Licht (Contact Author)

Reichman University ( email )

Israel

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

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