Christi Perou
In my dissertation I examine whether the principle of corporate social responsibility (hereinafter CSR)
is mirrored in section 172 of the Companies Act 2006 (hereinafter CA 2006). CSR means moving away
from shareholder wealth maximisation towards responsibility to a broader range of stakeholders.
Stakeholders can be defined as groups that are likely to be affected by the operation of a company,
for instance the shareholders, the employees, the consumers, the environment etc. In my dissertation
I will argue that nowadays CSR is used as a marketing strategy for ‘window dressing.’ S172 promotes
the principle of the enlightened shareholder value, ESV, which requires the directors, in promoting
the success of the company for the benefit of the members, namely the shareholders, to balance the
interests of various stakeholders mentioned in the provision. It was argued that ESV changed the
approach to corporate objective by introducing the requirement for directors to consider a variety of
interests other than those of shareholders. However, I will argue that the approach to corporate
objective did not change since the interests of shareholders still are supreme. Lastly, I will conclude
that the law is formed in such a way that compels directors to act first and foremost in the interests
of shareholders without leaving scope for CSR.