Modernising corporate objective debate towards a hybrid model

Abstract

In the light of the increasing significance and vivid dynamism of corporate governance practices, a vast amount of literature has been dedicated to the development of modes of corporate governance. This subject deals with the rights and responsibilities of boards of directors, their shareholders and stakeholders, and the balancing of their individual interests with the economic goals of the organisation as well as the interests of society as a whole. A fundamental topic lies at the heart of corporate governance regimes: whose interests should corporations be serving? This article rethinks the shareholder and stakeholder theory debate, treating it as a contemporary topic worth reconsidering in the context of the current climate of corporate scandals and financial crisis. Learning from experience, the article offers some guidance on how to establish an efficient corporate governance model by adopting hybrid model principles for higher investor confidence, bettercorporation shape, more active involvement from shareholders and stakeholders and more considerations of the views and interests of stakeholder groups. Thus, this paper provides some thoughts on corporate objectives in the convergent corporate governance model in order to formulate a hybrid model mechanism and provide some guidance for directors in the carrying out of their function.