An analysis of enlightened shareholder value in light of ex post opportunism and incomplete law

Keay, Andrew and Zhang, Hao 2011, An analysis of enlightened shareholder value in light of ex post opportunism and incomplete law, European company and financial law review, vol. 8, no. 4, pp. 445-475, doi: 10.1515/ECFR.2011.445.

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Title An analysis of enlightened shareholder value in light of ex post opportunism and incomplete law
Author(s) Keay, AndrewORCID iD for Keay, Andrew
Zhang, Hao
Journal name European company and financial law review
Volume number 8
Issue number 4
Start page 445
End page 475
Total pages 32
Publisher De Gruyter
Place of publication Berlin, Germany
Publication date 2011-01
ISSN 1613-2548
Summary In the UK's Companies Act 2006 the traditional shareholder value principle was modified by the introduction of the principle of enlightened shareholder value, the primary source of which is section 172(1). Included in this provision is a requirement for directors to have regard for the interests of certain stakeholders when exercising their duty to promote the success of their company, and this article refers to this as the principle of due consideration. Based on the incomplete law framework, this article reveals that the principle of due consideration for stakeholders has the potential effect of checking ex post opportunism on behalf of shareholders and/or directors against non-shareholding stakeholders. As such, this principle could make a positive and value-adding contribution to all concerned simply because ex post opportunism of any kind is unfair and bad for business. Moreover, our analysis further suggests that if the potential effect of the principle of due consideration is to become real, a process of trial and error in the form of actual cases brought to, and tried in, the courts over time is required.
Language eng
DOI 10.1515/ECFR.2011.445
Field of Research 1801 Law
Socio Economic Objective 970118 Expanding Knowledge in Law and Legal Studies
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2011, De Gruyter
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Document type: Journal Article
Collections: Faculty of Business and Law
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