Exploring the Theoretical Basis for Stakeholder Protection in Corporate Governance

Abstract

The paper seeks theoretical justification for the protection of company’s stakeholders under the general corporate law. This ordinarily raises the issue of corporate governance bordering on the questions as to whose interests a corporate entity should be run, and what the best interests of the company, presently entrenched in the company’s statute, entails. Finding answers to these questions demands the exploration of the corporate law theories that exert influences on the different models of corporate governance. The paper concludes that the important roles of the stakeholders to the success and sustainability of the corporate enterprise strongly justify their inclusion and the consideration of their interests at the same level as those of the shareholders under the corporate law.