Book4-Pg-28 Corporate Governance

My brains seems to be in coma since it’s pretty late here, would appreciate if someone could explain me the answer to this question - 7E in plain english. I have been reading the answer given to this Q on 268 for a while now.

7E. ’ Identify two possible duties towards society from the stakeholders’ societ perspective. Compare ways in which OC could incorporate social responsiveness with its other responsibilities to stakeholders, Discuss two objections to OC’s incorporaton of non-shareholder stakeholders."

you should go to sleep now. your Page no. above is wrong (I can imagine!)

anyways which part you didn’t understand in 7E ?

Let’s discuss what are the advantages and disadvantages of a ‘stakeholder’ society perspective? 2 each.

On top of my head… let me see…

Disadvantages - focus is lost, no clear defined goals for management now, too many heads involved in decision making, creditors and shareholders don’t like the idea that community and employes are also given the same status in investment decison making, management can use tactics like ‘I don’t want the merger since it will layoff 35,000 employess’ - To benefit employees welfare, we are letting go the M&A which could have been a +NPV thing in the future, too much focus on environmental issues which increases cost and something about robinhood tax distribtion is best done by tax authorities.

Anyone wants to add to this? or may be list down Advantages?

limited ability to raise capital

inefficient decision making

lack of managerial control

inefficient redistribution of taxes