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ECMLG'13: Don't forget the stakeholders' interests
Marina Lovrincevic (University of Split, Croatia) presented a very interesting paper on the relationship between supervisory board efficiency and stakeholder orientation. In so doing, Lovrincevic exposed a chasm between the Euro-centric view of the sustainable purpose of the company (based on stakeholder theory) and the Anglo-American view (agency theory).
Lovrincevic's analysis, of empirical data from a sample of Croatian non-financial listed companies, asserted that supervisory boards are helpful to protecting the interests of the wider set of stakeholders. An interesting debate ensued, essentially comparing and contrasting the Friedman view (value maximisation for the shareholder) and the stakeholder view (value distribution). The audience seemed to agree that the paper provided an interesting platform for future research, particularly research to explore whether a modified view of stakeholder theory might provide a more complete basis for effective governance.
Lovrincevic's analysis, of empirical data from a sample of Croatian non-financial listed companies, asserted that supervisory boards are helpful to protecting the interests of the wider set of stakeholders. An interesting debate ensued, essentially comparing and contrasting the Friedman view (value maximisation for the shareholder) and the stakeholder view (value distribution). The audience seemed to agree that the paper provided an interesting platform for future research, particularly research to explore whether a modified view of stakeholder theory might provide a more complete basis for effective governance.
I understood that the UK legislation requires boards to act in the best interests of the company, exactly as is the case in Australian and New Zealand legislation, whereas US boards are charged to act in the best interests of the shareholder. Notwithstanding the recipient of the best interests, the basis is value creation for the "owner". In contrast, the supervisory board of the two-tier governance structures (as exists in Germany and other jurisdictions) are designed to consider and accommodate the wider set of views and wishes of various stakeholder groups.
I would appreciate you sharing your understanding of the UK legislation, to help me understand how and where the UK legislation incorporates the stakeholder view that you mention.