Is there a conflict between a company's responsibility to its shareholders and its responsibility to society as a whole?
2006-11-14 05:37:26 · 5 answers · asked by jr_goldstein 1 in Business & Finance ➔ Corporations
Yes. The companies primary responsibility to shareholders is to maximise their wealth, whether this is through capital gains (increase in share value) or through dividends. In order to increase the share value, there needs to be sustained growth and profitability.
Some actions a company may take to increase their profitability may conflict with the interests of society. For example, investment into researching and developing environmentally friendly products will, in the short term, reduce profits available for distribution to shareholders.
2006-11-14 05:47:22 · answer #1 · answered by anon 3 · 0⤊ 0⤋
yes, there has always been a conflict between satisfying the investors and/or the society. They will never match at all. The managers of the company has to raise the value of the company or the shares (profits making) and the poor people wants lower prices and in some how FREE services. But what i think is that the managers should raise investors wealth since they are the one who are feeding the company then, making some social repsonsibitly for the society.
2006-11-14 06:13:31 · answer #2 · answered by Nablus 1 · 0⤊ 0⤋
the directors of a company are responsible for looking after the company on behalf of the shareholders. shareholders should be aware of the companys performance to see if their investment is sound
any large plc has a responsibility to society
2006-11-14 05:41:01 · answer #3 · answered by Sarah 3 · 0⤊ 0⤋
Definitely. Shareholders want high profits and society wants low prices.
2006-11-14 05:45:16 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Could be. You'd have to be more specific to know.
2006-11-14 05:39:37 · answer #5 · answered by Shibi 6 · 0⤊ 0⤋