SHAREHOLDERS PROFIT MAXIMIZATION AND STAKEHOLDERS INTERESTS IN CORPORATE GOVERNANCE

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Abstract

Shareholders profit maximization is seen as the traditional role of corporations as directors appointed by the shareholders feel obliged to pursue the greatest benefit of their principals even at the expense of other stakeholders. But that view is gradually conceding ground to the enlightened shareholder value approach to corporate governance arising from over-whelming public pressure on the corporations to expand their scope of interests to reflect societal dynamics. The paper argues that this minimal concession is inadequate to afford the stakeholders a fair protection in the hazardous operations of some multinational corporations in the modern world. A case is made for a shift to the pluralist approach that gives equal consideration to the shareholders and other stakeholders interests in realization of the fact that the stakeholders contribute immensely to the success of the company and suffer enormously from neglect in the course of the company’s operations.

Keywords: Shareholders, Stakeholders, Corporate Governance

How to cite this paper: Nwafor, A. O. (2014). Shareholders profit maximization and stakeholders interests in corporate governance. Corporate Ownership & Control, 11(4-7), 670-681. https://doi.org/10.22495/cocv11i4c7p9