Strategic Management Review > Vol 6 > Issue 3

Directors as Trustees: The Nash Axiomatic Approach to Multi-Stakeholder Governance

Vicente Salas-Fumás, School of Economics and Business, University of Zaragoza, Spain, vsalas@unizar.es
 
Suggested Citation
Vicente Salas-Fumás (2025), "Directors as Trustees: The Nash Axiomatic Approach to Multi-Stakeholder Governance", Strategic Management Review: Vol. 6: No. 3, pp 293-331. http://dx.doi.org/10.1561/111.00000082

Publication Date: 22 Apr 2025
© 2025 now Publishers, Inc.
 
Subjects
Game theory,  Industrial organization,  Strategic Management,  Stakeholder strategy,  Organization and strategy
 
Keywords
Stakeholders' governanceaxiomatic Nashtransaction costsvalue creation and appropriation
 

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In this article:
Introduction 
Literature Review and Background 
The Trustee's Implementation of the Nash Axiomatic Solution in the Governance of the Stakeholders' Firm 
Implementation Issues 
Conclusion 
Appendix. The Nash Bargaining Solution and the VCA Approach 
References 

Abstract

The view of corporate managers as agents of the shareholders has been questioned from inside and from outside the business community, with demands that they be committed, instead, to value-maximization for all stakeholders. This paper maintains that existing theories of strategy make implicit or explicit assumptions on the irrelevance of transaction costs in the processes of value creation and appropriation that result in a minor role of managers and directors in stakeholders' value-maximization. Next, it explains why managers and directors acting as trustees of the business venture, with the mission of governing and managing the business under the prescriptions of the axiomatic Nash bargaining solution, can be a transaction costs efficient way of governing the multi-stakeholders firm.

DOI:10.1561/111.00000082