Length: 2,000 words total (+/- 10%).Reference list and cover sheet details are not included in this...

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Length: 2,000 words total (+/- 10%).Reference list and cover sheet details are not included in this word-limit total.Weighting: 25% of total unit marks Assessment Criteria:· Demonstration of knowledge of the issues and evidence of wide reading to support your analysis· Demonstration of your ability to apply the knowledge to identify keys issues leading to your recommendations· Evidence of sound reasoning and the exercise of professional judgement to support your recommendations· Development and statement of concise recommendations for presentation to the AICD· Overall structure and professional presentation of the report to the AICD· High quality written communication of concepts and terms in ordinary English as not all readers of the report can be assumed to be specialists competent in corporate governanceCase Study‘As a separate legal person, a corporation has two basic objectives: To survive and to thrive. Shareholder value is not the objective of the corporation; it is an outcome of the corporation’s activities. While shareholders entrust their stakes in a corporation to the board of directors, shareholders are just one audience among others that the board may consider when making decisions on behalf of the corporation.These audiences, typically called stakeholders, may also include other financial stakeholders, such as bondholders, and nonfinancial stakeholders, such as employees, customers, suppliers, and NGOs representing various concerns of civil society. In the face of limited resources, no matter how large the corporation, directors must make choices regarding the significance of the corporation’s many audiences.’Source: Robert G Eccles and Tim Youmans (2015) ‘Why Boards Must Look Beyond Shareholders’, MIT Sloan Management Reviewhttp://sloanreview.mit.edu/article/why-boards-must-look-beyond-shareholders/RequiredAssume you have been employed as a corporate governance consultant by the Australian Institute of Company Directors (AICD). The AICD is concerned that many company directors hold the opinion that the company’s board of directors has a responsibility to place the interests of shareholders above all other stakeholder interests.Your assignment is to prepare a report to be submitted to the AICD evaluating the evidence that the responsibility of a company director is to place shareholder interests above those of other stakeholders. Specifically, the AICD has requested that your report contain evidence, examples and recommendations for company directors that will guide them when making board decisions so they are responsive to diverse stakeholder audiences. The AICD has advised you that they intend to make your report a public document and it will be uploaded to the website so it can be read by both corporate governance specialists and non-specialists.

Robert · Accepted Answer

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DIRECTOR RESPONSIBILITY TO PLACE INTERESTS OF SHAREHOLDERS ABOVE 
ALL OTHER STAKEHOLDER INTERESTS
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Introduction 
 The opinion of the directors of the different companies has an important place in the 
corporate governance that helps to create a new rule for stakeholders that are directly or 
indirectly linked to the companies. The opinion of the director is generally made for the benefits 
of the company and its shareholders on the priority basis (Blanpain et al. 2011) In this scenario, a 
director of a company has a responsibility to place the interests of shareholders above all other 
stakeholder interests. This is because of the right as the owner of a company and taking benefits 
more than the stakeholders.  
 Although this opinion of a director raised doubt that needs to be evaluated through 
evidence and examples and prove its validity to guide other directors  while making board 
decisions to diverse stakeholder audiences. Firstly, it is known that there is a comprehensive 
increasing gap between the companies, common people, and stakeholders because of the subject 
matter associated with the corporate governance (Blanpain et al. 2011). This has become a 
repeated issue with all of them while getting benefits in the market. The awareness in the public 
at the forefront usually receives transparency and high visibility in case of both the national and 
international business scenario.  
 However, it is necessary to understand that stakeholders are the key part of the 
organization that are known as creditors, directors, and employees. At the same time, 
government, shareholders (owners), and suppliers, as well as unions are also known as 
stakeholders of a company. On the other side, shareholders are the important part of a company 
that typically owns shares in the stock of the company (Blanpain et al. 2011). At this stage, the 
value of shareholder is not the primary objective of the company after getting shares; but an 
outcome due to the activities of the company matter for the shareholders. Although shareholders 
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trust their stakes or interests in a company to the board of directors. Therefore, shareholders are 
merely assumed as one audience among others. Additionally, as the important members of the 
company, the board consider them in making essential decisions on interest of the corporation. 
Evaluation of the Evidence 
The responsibility of a director in placing the interests of shareholders above all the other 
stakeholder interest is a good thinking because there is some group that believe as companies are 
obliged to their shareholders’ benefits in order to increase trust on the management and ways of 
working to extend a broad range of stakeholders in the market either national or international, 
even extending towards society as a whole (Wright et al. 2013). In an evident, there was an early 
document of the Cadbury, UK where the interest of the shareholders was placed above all other 
stakeholder interest in the corporate governance procedure because they believed that the system 
of the companies are directed and controlled by them effectively. Cadbury specifically believed 
that there is a set of relationships with the management of the company and its shareholders, 
including other stakeholders that help to improve the business in the market.  
 The role and responsibility of a director are also considered as to protect and move 
forward the shareholders’ interests with the help of setting the strategic direction and plan of a 
company. The interests of shareholders above all other shareholders’ interests can also be 
achieved by a director when appoints and monitors the capable management (Wright et al. 2013). 
A director generally believes that the system of checks and balances are the part of both internal 
and external process of the companies that usually ensures that companies are responsible to 
discharge their accountability towards all their shareholders. The act of companies also assures 
that they are socially responsible towards whole areas of business activity.

Length: 2,000 words total (+/- 10%). Reference list and cover sheet details are not included in this word-limit total. Weighting: 25% of total unit marks Assessment Criteria: · Demonstration of...

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