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Influence of Public Policy on Governance: Is there a Role for Shareholders as Stakeholders?

ABSTRACT

This study examines whether corporations should operate solely to maximize shareholder value or to serve a more broadly defined, diverse set of social interests. This paper reviews how American public policy toward corporations has rested upon different answers to this question, from colonial times to the twenty-first century. It does so in order to provide a historical context in which to view the social and ethical issues that underlie recent corporate scandals. In the last several years, powerful Chief Executive Officers (CEO's) have been forced out by the board members, employees, shareholders, and the government for poor performance or ethical improprieties. Boardroom scandals ...

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