The Relativity Legitimacy of Shareholder Rights

The heterogeneity of social judgment is open to further theoretical articulation. Drawing inspiration from the reference framework concept of Einstein’s relativity philosophy, we aim to develop a legitimacy framework with a general rule by theorizing narratives from 33 interview partners regarding their experiences of shareholder engagement in sustainability. We found that shareholders’ judgments on business performance and shareholder-board relationships shift with the alternation of judgment standards. Our theory suggests that the degree of judgment standard clarity affects the effectiveness of shareholder engagement. Our study advances legitimacy theory building and theory praxis in nascent policy spheres such as sustainability, digitalization, and artificial intelligence (AI) governance.