From Shareholder Value Maximisation to a More Sustainable Stakeholder-Centred Regime? The Evolution of Corporate Governance Since the Global Financial Crisis

Abstract

Corporate governance means a system of rules, practices, and processes by which a firm is directed and controlled. Therefore, corporate governance essentially involves balancing the interests of a company’s many stakeholders. In other words, it is a system that a company implements to ensure that it serves its governing objective. Governing objective is essentially a statement of what a company is trying to achieve. The definition of the idea of a firm’s governing objective can be deducted from different standpoints. Due to the influence of US hegemony in today’s market economy, it can be argued, that the dominating approach to define the idea of a company’s governing objective is through the goal of maximising the shareholder value. However, due to the financial crisis of 2008, the theoretical underpinnings of the shareholder value maximisation thinking were questioned. This bachelor’s thesis consists of a review of literature in relation to the shareholder value maximisation thinking and aims to describe and discuss how the corporate governance thinking in the Western hemisphere market economy is seemingly shifting towards a more sustainable, regional and stakeholder-oriented way of defining a company’s governing objective.