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(Stakeholders and Corporate Governance) - Coggle Diagram
Stakeholders and Corporate Governance
core areas
Corporate social responsibility
The Pyramid of Corporate Social Responsibility
Legal Responsibilities
Ethical Responsibilities
Philanthropic Responsibilities
Economic Responsibilities
Modern corporations' mechanisms of governance
represents the relationships among the stakeholders that is used to determine and control the strategic direction and performance of the organization
agency costs
the agent=manager
will the agent act in the interest of the principal?
How to reduce the agency cost?
monitoring costs
the principal can monitor the agent's behavior more
enforcement cost
penalties for non-compliance
incentive costs
provide the agent with more incentives
the principal=shareholders
Example
Franchisor-franchisee relationship
the public firm
Characteristics
transferability of investor interest: the owners of stock can buy and sell stock
legal personality
limited liability for investors
separation of ownership and control
Introduction
Nexus with stakeholders
Internal stakeholders
Managers
Shareholders
Bondholders
Employees
Board members
External stakeholders
Customers
Suppliers
Governments
Unions
Communities
General public
Recent developments