ARE ‘MODERN’ CORPORATIONS AND THEIR DIRECTORS BECOMING TOO POWERFUL, CONTRIBUTING LITTLE TO THEIR NON-SHAREHOLDING STAKEHOLDERS?

Abstract

It can hardly be denied that big corporations are very vital, if not indispensable, to the socio-economic cum political growth of any nation. A number of them contribute immensely to the welfare and well-being of the people by providing employment opportunities to the teeming population, assisting the local communities by way of discharging certain social responsibilities and enrich the government by paying corporate taxes. Some of them have, however, become irresponsible and are hugely engulfed in their inordinate quest to maximise wealth that they care little about the negative impacts of their corporate operations and decisions on the non-shareholding stakeholder constituencies. They are primarily and essentially concerned with the economic well-being of their shareholders to the detriment of other stakeholders. Some of them have amassed so much wealth and such huge power to the extent that they have weakened government’s ability to control them. They are also using their ever-increasing power to influence government decision-making process by aggressive acts of lobbying so that laws and regulations that are made are those that favour them. As these companies have become so wealthy, the question, or rather, expectation on the minds of some people is a commensurate increment in their social responsibilities and social responsiveness. This is, most often, not the case as they are preoccupied with furthering the economic interests of their shareholders by maximising the shareholders’ wealth. This work thus sets out to stress the importance of the corporations to be mindful and integrative of the interests of the non-shareholding stakeholders. This, it does, using doctrinal research methodology, relying mainly on primary and secondary sources of data. The work concludes that it is in the best interests of the company if their directors are responsible and consider not only the interests of the shareholders but those of other stakeholders.