Beyond shareholder value: a CSR model for corporate governance

Abstract

Agency theory dictates that the sole purpose of a corporation is to provide value to its shareholders. As the dominant focus for corporate governance of publicly held stockholder corporations, agency theory has led to the current global economic crisis, and a history of scandals, and unethical behaviour on the part of transnational corporations. This paper will propose changes to corporate governance regulations to balance the unintentional incentives for unethical business practices, with incentives for social responsibility, in the hope that the reoccurrence of corporate scandals can be avoided.