Category Archives: 2 BD. L. REV. 2(2016)

In Exploring the Enlightened Shareholder Value Principle: Has There Been Any Change in The Way a Company Conduct Its Business?

by  Mohammad Nayeem Firoz

csr manby JA’FAR ALSABBAGH

 

1.      Introduction

For whose benefit and at whose expense should directors operate the firm.”[1] A historical debate that still stands today with the same tension it did one century ago.[2] Alongside theoretical academia, different jurisdictions still in dispute on whom should receive the attention of a firm; shareholders or other stakeholder constituencies, including employees, creditors and customers.

Corporations are the primary vein of any country’s economy. The profound influence they carry on peoples’ life, place them in a sensitive position that requires continual evaluation. Nonetheless, this continuance evaluation has been largely surrounding the discussion of the actual objective of companies. Although a company is an entity whose “defining characteristic is the attainment of a specific goal or purpose,”[3] there is no actual agreement on what that goal or purpose should be. For centuries academics have been asking:  Should directors merely care about maximising shareholder profit or … [....]