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

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.