Corporations Are Only Accountable to Shareholders. They Do Not Have Social Responsibilities.
Corporations are only accountable to shareholders. They do not have social responsibilities. Before commencement on making my stand in this topic, a clear definition of the aspects of this topic is essential. Firstly, a corporation can be define as a legal entity or structure created under authority of the laws of a state, consisting of a person or group of persons who become shareholders (All business 2010). Also, a corporation has the right to sue and be sued, own and sell property, and enters into contracts using its name (Velasquez 2006). The next definition is to define shareholders. ‘The simplest definition of a shareholder seems straightforward enough: an individual, institution, firm, or other entity that owns shares in a company’ (Mallin 2007, p. 49). Lastly, we define social responsibilities. The corporate social responsibility (CSR) refers to the general belief held by growing numbers of citizens that modern business have responsibilities to society that extend beyond their obligations to the shareholders or investors in the firm (Wood 2007, p. 122). It implies that negative business impacts on people and society should be acknowledged and corrected if at all possible (Post, Lawrence & Weber 1999).
Rephrasing the topic, it basically means that a corporation is only answerable to its shareholders and they are not responsible for all the actions they take in order to achieve the corporation’s goal. I do not agree to this statement. Corporations not only own their duties to the shareholders, a corporation also should be answerable to others like the stakeholders for example. Although shareholder’s interests are the top of the corporate agenda, stakeholder interests should not be ignored as well (Mallin 2007). In short, corporations should have social responsibilities towards their actions. Following up this essay, I will discuss further on the social