Corporate Sustainability: Shareholder Primacy Versus Stakeholder Primacy

Business organizations are being encouraged to define their purposes,values,and fiduciary duties of creating shared value for all stakeholders. The stakeholder primacy system encourages directors and executives to focus on managing corporate activities toward creating shared value for all stakeholders, while the board of directors is responsible for overseeing the managerial function and effectively communicating sustainability performance information. This book offers guidance to organizations for considering both shareholder primacy and stakeholder primacy in defining their mission of profit-with-purpose and creating shared value for all stakeholders.

Format: Paperback / softback
Length: 150 pages
Publication date: 14 July 2021
Publisher: Business Expert Press

Business organizations have recently received a strong push from investors, regulators, and communities to define their purposes, values, and fiduciary responsibilities in creating shared value for all stakeholders. Traditionally, public companies have operated under the corporate model of shareholder primacy, with the primary objective of generating returns for shareholders. As a result, corporate activities are managed with the goal of maximizing shareholder value.

The stakeholder primacy system encourages directors and executives to prioritize managing corporate activities to create shared value for all stakeholders. Under this system, the board of directors assumes a crucial role in overseeing the managerial function, focusing on long-term sustainability performance, and effectively communicating sustainability performance information to all stakeholders.

A growing trend worldwide is a shift away from the shareholder primacy model and toward the stakeholder primacy model. This shift is driven by the demands of investors, regulatory requirements, and companies embracing the profit-with-purpose mission. This book provides valuable guidance to organizations in considering both shareholder primacy and stakeholder primacy in defining their mission of profit-with-purpose and in creating shared value for all stakeholders. It also highlights the collaborative efforts of people, businesses, and resources in fostering business sustainability and implementing the stakeholder primacy model to achieve shared value.

This book is of interest to a wide range of individuals and professionals involved in business sustainability and corporate governance, including directors, executives, financial reporting professionals, investment decision-makers, legal and financial advisors, audit functions, and corporate governance education. By understanding the principles of stakeholder primacy, organizations can align their strategies and operations to prioritize the well-being of all stakeholders, fostering long-term sustainability and creating a positive impact on society as a whole.

Weight: 128g
Dimension: 151 x 229 x 8 (mm)
ISBN-13: 9781637420867