Under the Code of Corporate Governance, the theory espoused is a form of intermediate theory, where the corporation has a fiduciary duty toward shareholders and is to deal with other stakeholders observing the moral minimum. It is assumed that observing the moral minimum will help enhance the value of the corporation, so it can be considered a kind of Strategic Management Theory as well.
Its fiduciary duty toward the shareholders is expressed in articulating the Board’s Duties and Responsibilities. Hence, the board has the duty and responsibility “to foster the long-term success of the corporation and secure its sustained competitiveness in a manner consistent with its fiduciary responsibility, which it should exercise in the best interest of the corporation.” Transparency is also required. For the “shareholders shall be provided, upon request, with periodic reports which disclose personal and professional information about the directors and officers and certain other matters such as their holdings of the company’s shares, dealings with the company, relationships among directors and key officers, and the aggregate compensation of directors and officers.”
See full Article.
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