Shareholder value, stakeholder value, corporate governance, Germany, USA, shareholder capitalism, management
With the growth of the economies worldwide the debate between shareholder and stakeholder capitalism has never been more intense than nowadays. Each country though incorporates this debate differently in its interior market since its corporate governance’s structures present distinguished characteristics. Thus, by bringing into this debate countries like Germany and the USA, the distinction between shareholders and stakeholders’ interests becomes clearer. Countries based on the Anglo-Saxon business model like the USA are in favor of a “shareholder primacy” based system setting as their optimal goal the maximization of shareholder value. On the other hand, countries like Germany seem to have a stronger preference for a stakeholder based system. Both countries though throughout the years have been tested to incorporate into their corporate governance structure models stemming from the opposite side.
Thus, the USA despite its stable preference for satisfying fiercely its shareholders’ interests have recently started to embrace views stemming from satisfying stakeholder value, adopting notions such as codetermination and public benefit corporation. At the same time, Germany despite its rigid stakeholder preference, for improving its position in the global business arena has been proposed to become more tolerant versus shareholders’ needs. Finally, in both countries efforts are made to satisfy both shareholders and stakeholders’ interests. However, the percentage of this satisfaction defers based on the needs of the corporations of each country.
Brandt, Fabian and Georgiou, Konstantinos, "Shareholders vs Stakeholders Capitalism" (2016). Comparative Corporate Governance and Financial Regulation. 10.