Business – Shareholder Interaction
Importance of Shareholders:
“Shareholders used to represent the only group that business were accountable to, i.e. business used to be run only in the interests of their owners. This represents the stockholder or shareholder model of the corporation. It is widely recognised today (although not necessarily practiced) that shareholders are one of the legitimate stakeholders that business need to be accountable to with regards to their products and services, operations and impacts. The trippe-bottom line model (coined by John Elkington) suggests that corporations need to extend their golas beyond serving the economic value maximisation by adding environmental and social value as equal priorities”. (Crane and Matten, 2016).
Relevant ethical issues:
- Executive accountability
- Executive remuneration
- Divergent interests between shareholders and managers
- Insider trading: fairness, misappropriation of property, harm to investors and the market, undermining fiduciary relationship