Corporate governance and stakeholder conflict (original) (raw)
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Corporate governance and democracy: The stakeholder debate revisited
Journal of Management and Governance, 2002
Stakeholding' is a term laden with many meanings. In this pape r we attempt to put some order on the discourse by confining attention to the corporation. We assess the origins and the intellectual foundations of the 'shareholder versus stakeholder' debate. We ask whether and how 'stakeholding' might be a more logical or rational system, a fairer or more democratic system, and one that provides better performative outcomes. Each of these claims is assessed in respect to the micro firm perspective and the macro economy wide perspective.
2007
The purpose of the present paper is to help bring some advances in the characterization of the emerging stakeholder model of corporate governance. This shall be achieved by analyzing CSR function at board level, board diversity and stakeholder engagement and by examining its relationship with financial performance. Based on an empirical study of an international sample of large companies, we found board responsibility for CSR to be a key factor in promoting engagement with primary and secondary stakeholders of the firm. Depending on the legal tradition of the country where the company is based, we found evidence that board diversity and stakeholder engagement are positively related to firm financial performance.
Stakeholder Theory from a Management Perspective: Bridging the Shareholder/Stakeholder Divide
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The law literature posits a wide chasm between the standard doctrine of shareholder primacy/shareholder wealth maximisation and stakeholder theory. In so doing, the law literature largely ignores the contribution of our colleagues in the fields of management and business ethics, many of whom conceive of stakeholder theory as an essential part of the good management necessary to maximise shareholder wealth. This article reviews major contributions from the management literature and explains how they can help lawyers understand the proper role that consideration of stakeholder interests should play in management decision making. It argues that stakeholder theory as conceived by the management theorists broadly aligns with the legal concept of enlightened shareholder value and does not conflict with the shareholder wealth maximisation objective as currently understood under dominant paradigms of Anglo-Australian corporate law. To the contrary, stakeholder theory supports shareholder we...
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One of the critical distinctions between shareholder theory and stakeholder theory rests on the role of management in the resolution of the firm's internal conflicts. Whereas managers are considered as a source of conflicts by agency/shareholder theorists, they are often viewed as useful mediators in the stakeholder approach. This paper proposes an alternative theory on the role of management in corporate governance, the so-called short term salient stakeholder theory, and illustrates it with a longitudinal case study of Eurotunnel, the Channel Tunnel operator. When the firm's legitimate stakeholders have very different information levels and bargaining strengths, this theory predicts that (i) firms are governed in the interests of a unique stakeholder group (ii) managers have a minor role and are prone to collude with the most powerful interest group (iii) this autocratic type of governance is unstable in the long-term as the legitimate stakeholders expropriated at one period use influence strategies to gain power in the next period (iv) the chronic conflicts associated to short-term salient stakeholder management lead to poor organizational performance.
Neither Shareholder nor Stakeholder Management
European Management Journal, 2007
One of the critical distinctions between shareholder theory and stakeholder theory rests on the role of management in the resolution of the firm’s internal conflicts. Whereas managers are considered as a source of conflicts by agency/shareholder theorists, they are often viewed as useful mediators in the stakeholder approach. This paper proposes an alternative theory on the role of management in corporate governance, the so-called short term salient stakeholder theory, and illustrates it with a longitudinal case study of Eurotunnel, the Channel Tunnel operator. When the firm’s legitimate stakeholders have very different information levels and bargaining strengths, this theory predicts that (i) firms are governed in the interests of a unique stakeholder group (ii) managers have a minor role and are prone to collude with the most powerful interest group (iii) this autocratic type of governance is unstable in the long-term as the legitimate stakeholders expropriated at one period use influence strategies to gain power in the next period (iv) the chronic conflicts associated to short-term salient stakeholder management lead to poor organizational performance.
European Journal of Business and Economics
Corporate governance (CG) has emerged as one of the most recognized areas for researchers, academics, practitioner, and regulators over the last few decades. This paper will initially present an epigrammatic overview on key developments in corporate governance along with the intellectual foundations of the ‘shareholder versus stakeholder’ argument. Additionally, this study tries to analyze the contemporary shift in the perception of corporations from the shareholders wealth maximization to stakeholder’s valuation. It has been noticed that investigating cross country and firm based variances in wealth distribution between diverse interest groups is likely to continue as major focus for CG study. It has been experienced that the nature of the corporation is changing around the globe, Big multinationals have been splitting into smaller liberated corporation, access to capital market is become easier and physical resources are easily replaceable and less exclusive to business strategy t...