The Importance of Board Independence (IVOR nr. 90) 2012/3.7.0:3.7.0 Introduction

The Importance of Board Independence (IVOR nr. 90) 2012/3.7.0

3.7.0 Introduction

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

The fifth theory discussed in this chapter is the stakeholder theory. The stakeholder theory argues that all groups and persons with legitimate interests involved in a company are important, which means that no group of stakeholders is more important than another (Donaldson and Preston 1995: 68). This view contrasts with the other four theories in this chapter, which regard shareholders as the most important constituency of the company (Mallin 2007: 12-13). The stakeholder theory is described in subsection 3.7.1 and board composition advised by stakeholder theorists is given in subsection 3.7.2. Table 3-6 first gives a short summary of the stakeholder theory, which is worked out further in the remainder of this section.

Table 3-6: Summary of the main characteristics of the stakeholder theory.

Description of theory

The stakeholder theory takes a larger group of stakeholders into account than only shareholders. Stakeholder analysis only identifies the important stakeholders, whereas stakeholder synthesis considers the identified stakeholders in the decision-making process.

Problem

The interests of stakeholders are not looked after in the decision-making process.

Solution

By identifying relevant stakeholders in a transaction and by using this information in the decision-making process, the company can benefit.

Focus on independence

This theory focuses on the stakeholders of the company and not on independence.

Deze functie is alleen te gebruiken als je bent ingelogd.