Stakeholders and Corporate Governance /Beneficiaries/ The Principles of Corporate Governance

Presented By Anusree Mitra Roll-03 MBA in Finance Batch:-2010-12

INTRODUCTION
The main issues concerned are as follows Early models based on maximising shareholders interest. Shift in trend from early 19th century to the early 20th century. Publication of true and fair picture by the Companies

CONFLICTING INTEREST
Conflict

between shareholders and stakeholders. Attention paid to corporate behaviour nowadays, comes from the increased freedom granted to Corporations to develop their business activities and the need that this freedom is used wisely and responsibly

CONFLICTING INTEREST (cont)

There

can be are many perspectives to view Corporations practices of promotion of constituencies other than shareholders interests. We link them to two competing theory of Corporate Governance: Shareholders theory (agency) and Stakeholders theory

CONCILIATION OF INTEREST
Balance

between the different groups of stakeholders is essential to the long-term viability of the Corporation. Stakeholders movement contains a prescription for corporations to pursue ends that go beyond the single interests of shareholders . Strategies to be developed to bring harmony between shareholders and stakeholders interest in term of customers , suppliers, skilled staffs.

CONTROL
Actions

in favour of clients, consumers, workers or even communities at large must be placed under control. There are various proposed schemes for Companies to inform the public about their Corporate Social practices. OECD guidelines on multinational enterprises. Regional attempts to grant uniformity to social responsibility practices and reporting initiatives- constituencies statutes.

CONTROL (cont)
Green

Paper published by European Commission to promote Corporate Social Resposibility in 2001 In March 2006 the EU Commission launched a new Communication to bring social and environmental concerns, to the centre stage on strategic sustainable development and growth There are, therefore, strong reasons why Europe should develop a common approach to corporate social responsibility as it provides a forum for governments and business to exchange information and share best practice.

Conclusion
Choose between either

maximizing shareholder wealth or caring for other interested parties. However, it can be argued that this divide is fallacious. Governance experts and Academics, Governments and Corporations have, at least, two serious challenges ahead: One is to achieve a consensus on how to define and prioritise the interests of stakeholders. The other is to formulate a comprehensive and efficient generally accepted reporting model to account for corporate actions in favour of nonshareholders constituencies.

Thank You