Shareholders and stakeholders: How do directors decide?
Article first published online: 1 JUN 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 32, Issue 12, pages 1331–1355, December 2011
How to Cite
Adams, R. B., Licht, A. N. and Sagiv, L. (2011), Shareholders and stakeholders: How do directors decide?. Strat. Mgmt. J., 32: 1331–1355. doi: 10.1002/smj.940
- Issue published online: 3 OCT 2011
- Article first published online: 1 JUN 2011
- Accepted manuscript online: 16 MAY 2011 08:45AM EST
- Manuscript Revised: 3 MAY 2011
- Manuscript Received: 5 AUG 2009
- corporate governance
This study examines how directors make decisions that involve shareholders and other stakeholders. Using vignettes derived from seminal court cases, we construct an index of directors' shareholderism as a general orientation on this issue. In a survey of the entire population of directors and CEOs in public corporations in one country, we find that directors' personal values and roles play an important part in their decisions. Directors and CEOs are more pro-shareholder the more they endorse entrepreneurial values—specifically, higher achievement, power, and self-direction values and lower universalism values. While employee representative directors exhibit a lower baseline level of shareholder orientation, they nonetheless often side with shareholders. Copyright © 2011 John Wiley & Sons, Ltd.