Download This PaperShareholder Primacy Theory vs. Stakeholder Theory
5 Pages Posted: 24 Apr 2020
Date Written: March 31, 2020
Abstract
This article presents the practice of shareholder primacy theory and stakeholder theory, with the support of relevant laws and examples in American and British contexts. Here the article argues that managers following shareholder primacy theory should always act in a manner that they reasonably believe they are serving the best interests of the corporation. Such a belief does not exclude directors and managers from considering the interests of non-shareholders as whether “the best interests of the corporation” encompass non-shareholders’ benefits is arguable. In addition, this article discusses corporate social responsibility (CSR) and argues how CSR is related to the practice of stakeholder theory and an improvement of both public and corporate interests.
Keywords: Shareholder Primacy, Stakeholders’ Interest, Corporate Social Responsibility
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