what are some governance issues with regards to the shareholder theory? (not stakeholder theory)
what are some governance issues with regards to the shareholder theory? (not stakeholder theory)
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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what are some governance issues with regards to the shareholder theory? (not stakeholder theory)
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Shareholder theory only aims at maximizing shareholder’s profit. The shareholder theory states the traditional view of a corporation's purpose of earning maximum profit and providing benefits to the owners of the company in the form of a good return. The returns are provided to the shareholders in the form of dividends or increased share prices. The managers working under the shareholder’s theory are obliged under an ethical duty towards the owners to generate significant value for their investment.
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