- Title
- What do shareholders really expect? A survey of shareholder attitude to stakeholder management in Australian banks and other companies
- Creator
- Carne, Marty
- Resource Type
- thesis
- Date
- 2019
- Description
- Professional Doctorate - Doctor of Business Administration (DBA)
- Description
- Over several decades, there has been an academic debate concerning whether companies should be operated for the benefit of shareholders or for the benefit of stakeholders. This has practical implications for management : which approach should directors and company officers observe? The former approach, known generally as Shareholder Wealth Maximization Theory, sees shareholders as the exclusive or primary beneficiary of the company. It is the traditional approach and regarded as the incumbent. However, it is criticized as being unfair, unsustainable and not having regard for the mutual reliance that the company and society should have on each other. The latter approach, Stakeholder Theory, calls for a balanced distribution of benefits arising from the company’s operations, recognizing that the company and society co-exist. This theory is criticized for not defining precisely who the company’s stakeholders are and how a balance between shareholders’ and stakeholders is to be achieved. Generally, the law in Australia recognizes that directors and officers may, but are not required to, provide benefits to stakeholders where they do so for a proper purpose. What do shareholders expect? There are volumes of academic papers and articles concerning Shareholder Wealth Maximization Theory and Stakeholder Theory. Most is normative and comparatively little relates to empirical investigation or analysis. Even less researches shareholder expectations of stakeholder management. The research underlying this thesis used a survey to ask shareholders what they expected of management when it comes to stakeholders. The focus is on the views of shareholders with regards to banks, since at the time the research was conducted banks and related companies in the financial services industry were facing increasing pressure to satisfy stakeholder claims. Among other questions, the research asked “for whose benefit do shareholders think management should operate the company?” “Do shareholders think the company has a social purpose?” “If so, how is this to be achieved?” “Is the social responsibility of banks any greater than for other companies?” The findings of the research indicate that shareholders generally expect the company to be managed for their primary benefit, not stakeholders. They do not expect the company to be operated for their exclusive benefit and they do consider that the company has a social purpose and a role to play in society. This social purpose is greater for banks than other companies, generally, although equal to that of mining companies. Shareholders believe a company achieves its social purpose or role best by operating fairly and equitably and by producing goods and services that consumers and society value. Shareholders think the beneficiary of the company’s social purpose should be society generally, not specific groups or causes. This research contributes to the academic debate by providing the shareholder’s perspective on whether the company should be operated for the benefit of shareholders or stakeholders. From a practical perspective it assists management with the knowledge that shareholders expect companies to provide social benefits and they expect this to be achieved not by compromising on the results returned to them, but by the way in which the company is operated. For banks, it seems shareholders may agree with the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2019).
- Subject
- stakeholder theory; shareholder wealth maximization; social licence to operate; shareholders; Australia
- Identifier
- http://hdl.handle.net/1959.13/1408474
- Identifier
- uon:35844
- Rights
- Copyright 2019 Marty Carne
- Language
- eng
- Full Text
- Hits: 1840
- Visitors: 2416
- Downloads: 689
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | ATTACHMENT01 | Thesis | 4 MB | Adobe Acrobat PDF | View Details Download | ||
| View Details Download | ATTACHMENT02 | Abstract | 348 KB | Adobe Acrobat PDF | View Details Download |