Firms’ Objectives, Board Heterogeneity and Incentives
Assistant Professor of Accounting Dhananjay
Nanda's research highlights the consequences of for-profit firms
serving social objectives with a view to addressing the question: are multiple
objectives better served by a single firm or by multiple firms each focused
on a single goal? The research extends the neo-classical view of a for-profit
firm to include other stakeholder goals, examining how having multiple goals
(shareholder value maximization and social objectives) affects the composition
of firms’ board of directors, and consequently, management incentives
and performance. The researchers will quantify the financial consequences
of for-profit firms serving social objectives. Further, this research will
be able to address whether social objectives are better served by for-profit
firms or by firms established with the sole objective of serving a social
goal. Subsequently, the researchers will extend their frameworks, findings
and theory to the social sector using data on the accounting performance
of nonprofits. This work will result in a conceptual paper for social sector
practitioners interested in blending social and profit objectives and serving
multiple stakeholders.
Download initial working paper, "Access, Common Agency, and Board Size"