Is the approach of maximizing shareholder wealth compatible with stakeholder objectives?

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[...] Ultimately, the aim is to implement a strategy known as 'enlightened value maximization'. This approach takes into account not only the needs of shareholders, but also those of other stakeholders, including employees. In the long term, this limits agency costs and helps the company to run more smoothly, thereby promoting growth. Indeed, because employees are taken into account, they can be motivated and invest their energies to the full. There is therefore a direct relationship between the study of a company's agency costs and its growth, directly impacting shareholder wealth. [...]

[...] Conclusion We can deduce that the approach must be multifaceted, and cannot be confined solely to maximizing shareholder wealth. In fact, as we saw when studying Michael C. Jensen's article, it is important to take into account needs other than those of shareholders alone. Indeed, if we take into account only the needs of shareholders, we may find ourselves in a delicate situation, insofar as this approach may be detrimental, in the long term, to the smooth running of the company. [...]

[...] Is the approach of maximizing shareholder wealth compatible with stakeholder objectives? I. Introduction While the approach of maximizing shareholder wealth may be compatible with the objectives of stakeholders, notably to grow the company, there are elements of indomitability linked to the fact that the company must also make investments, for example. However, it is considered that maximizing shareholder wealth can be seen as a company's primary objective, while stakeholder objectives bring together a wider range of interests. Based on the study of an article published by Michael C. Jensen (Harvard Business School) entitled Value Maximization, Stakeholder Theory, and the Corporate Objective Function*, we will look at the limits of an approach aimed at maximizing shareholder wealth for other stakeholders. [...]

[...] Thus, the maximizing shareholder wealth approach can be compatible with other stakeholder objectives. However, the maximizing shareholder wealth approach is not necessarily compatible with other approaches if the interests of other stakeholders, including employees but also customers, are taken into account. Value creation must take all these issues into account, despite the fact that it is the shareholders who bear the residual risk in the event of the company defaulting Jensen and Meckling (1976). Furthermore, the separation between ownership (which belongs to shareholders) and control (which belongs to all stakeholders, including employees) gives rise to agency costs, which are detrimental to the maximization of wealth for shareholders, but also for the company more generally. [...]