Question
Download Solution PDF"Corporate governance is to conduct the business in accordance with the owner's (shareholders) desires" is conceptualized by
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Milton Friedman.
Key Points
- The concept that "Corporate governance is to conduct the business in accordance with the owner's (shareholders) desires" is commonly associated with the shareholder primacy theory.
- This theory suggests that the primary goal of a corporation should be to maximize shareholder value, and that corporate decisions and actions should be made with this goal in mind.
- According to this theory, corporate governance is a system of rules and practices that is designed to ensure that the interests of shareholders are protected and advanced by the actions of corporate managers.
- This includes measures such as the election of a board of directors, the establishment of executive compensation plans, and the requirement of regular financial reporting and transparency.
Hence, the correct answer is Milton Friedman.
Last updated on Jun 12, 2025
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