Zara Case Study
Corporate Ownership & Control / Volume 4, Issue 4, Summer 2007
96
CORPORATE GOVERNANCE: SHAREHOLDERS’ INTERESTS’ AND
OTHER STAKEHOLDERS’ INTERESTS
Elena F Pérez Carrillo*
Abstract
Much of the traditional Company Law doctrine considers that Corporations must be managed to promote, above all, shareholders’ rights. Activities in favour of non-shareholder constituencies such as suppliers, consumers, employees or the Community at large can be perceived as a means of
Management to increase its power and personal prestige. Stakeholders’ interests can be interpreted as opposing Shareholders rights to obtain fair revenue for their investment. In this paper, we argue that Shareholders and Stakeholders interests are compatible and both contribute to corporate long term efficiency and progress. It is further argued that it is essential to achieve a wide consensus on how to control Management actions in support of Stakeholders interests.
Keywords: Shareholders, Stakeholders, Corporate Social Responsibility, Corporate Social
Citizenship, Corporate Social Practices Reporting
*Universidad Santiago de Compostela
1. Introducion
Much of the world’s public attention of the early years of the XXIst century had it origin in failures within Big Multinational Corporations such as Enron or Parmalat, that evidenced that the functioning of certain elements of late XXst century Corporate
Governance models based on maximisation of shareholder’s interests, were not able to ensure sustainable development of Corporation activities1.
Corporate governance through the protection of a wider set of interests can be regarded as an alternative way of efficiently conducting Corporate
Governance. Taking into consideration other stakeholders’ interests is often regarded as fairly recent in development, and Freeman is generally cited as its landmark. However neither this idea nor many of its practices are new. From a philosophical standpoint it has been related with
96
CORPORATE GOVERNANCE: SHAREHOLDERS’ INTERESTS’ AND
OTHER STAKEHOLDERS’ INTERESTS
Elena F Pérez Carrillo*
Abstract
Much of the traditional Company Law doctrine considers that Corporations must be managed to promote, above all, shareholders’ rights. Activities in favour of non-shareholder constituencies such as suppliers, consumers, employees or the Community at large can be perceived as a means of
Management to increase its power and personal prestige. Stakeholders’ interests can be interpreted as opposing Shareholders rights to obtain fair revenue for their investment. In this paper, we argue that Shareholders and Stakeholders interests are compatible and both contribute to corporate long term efficiency and progress. It is further argued that it is essential to achieve a wide consensus on how to control Management actions in support of Stakeholders interests.
Keywords: Shareholders, Stakeholders, Corporate Social Responsibility, Corporate Social
Citizenship, Corporate Social Practices Reporting
*Universidad Santiago de Compostela
1. Introducion
Much of the world’s public attention of the early years of the XXIst century had it origin in failures within Big Multinational Corporations such as Enron or Parmalat, that evidenced that the functioning of certain elements of late XXst century Corporate
Governance models based on maximisation of shareholder’s interests, were not able to ensure sustainable development of Corporation activities1.
Corporate governance through the protection of a wider set of interests can be regarded as an alternative way of efficiently conducting Corporate
Governance. Taking into consideration other stakeholders’ interests is often regarded as fairly recent in development, and Freeman is generally cited as its landmark. However neither this idea nor many of its practices are new. From a philosophical standpoint it has been related with
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