Corporate Governance Article Swipe
YOU?
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· 2023
· Open Access
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· DOI: https://doi.org/10.1007/978-3-031-35009-2_3
· OA: W4386723132
Corporate governance is about controlling and directing the company. The starting point is the objective of the company. In the shareholder model, the ultimate control is with shareholders, who usually aim to maximise company profits and thus put financial value as the company objective. In contrast, the stakeholder model includes other stakeholders, notably employees and customers, alongside shareholders. The integrated model expands the company objective to integrated value, which combines financial, social, and environmental value. This includes not just current stakeholders and shareholders, but also future stakeholders, by representing the environment and people not yet born. The conflict of interest between managers and shareholders has been at the heart of corporate governance research for decades. However, this debate changes if one broadens the objective of the firm to integrated value. How does one balance the interests of the various stakeholders? What information is used for this balancing? What ownership structures and governance mechanisms are most effective in balancing these interests? How can management be held accountable to stakeholders? The answers lie in the concept of integrated value as introduced in Chap. 1 . It provides guidance on the required information; the alignment of interests; accountability; and decision-making, which involves dealing with trade-offs between the interests of various stakeholders.
