A REVIEW OF THE TWO MAIN COMPETING MODELS OF CORPORATE GOVERNANCE: THE SHAREHOLDERSHIP MODEL VERSUS THE STAKEHOLDERSHIP MODEL

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Tony Ike Nwanji, Kerry E. Howell

DOI:10.22495/cocv5i1p1

Abstract

This paper reviews the impact of the shareholdership and stakeholdership models in guiding managers through the most appropriate way of delivering business objectives. The shareholder model is the traditional Anglo-American system of corporate governance, which focuses on the maximisation of shareholder wealth, while the stakeholder model is considered to be exemplified by the German system of corporate governance and focuses on meeting the needs and expectations of a wider range of stakeholder groups. The results from this study indicate that a combination of both models could enable management to deliver the needs of stakeholders groups, while in the long term maximizing wealth for the shareholders.

Keywords: Corporate Governance, Shareholdership Model, Business Objectives, Stakeholdership Model, Business Ethics, Profit Maximisations

How to cite this paper: Nwanji, T. I., Howell, K. E. (2007). A review of the two main competing models of corporate governance: the shareholdership model versus the stakeholdership model. Corporate Ownership & Control, 5(1), 9-23. http://doi.org/10.22495/cocv5i1p1