Shareholders and Stakeholders Theories: Balancing the Conflicting Terms under OHADA and English Corporate Law

Abstract

In the past, corporate governance was a term demoted to the shadows of legal and academic texts and a subject far beyond the sphere of public interest. At that time, governance was related to the view of companies which held that they were entities to be managed by managers acting under the supervision of boards; the directors which in turn were responsible for providing the checks and balances necessary for the orderly conduct of the business. For years now, debates over the proper scope and content of corporate behavior and corporate law have exhibited one regularity; they always involve a clash between corporate shareholders and stakeholders. Countries based on the Anglo-Saxon business model like the UK, are in favor of a “shareholder primacy theory” based system setting as their optimal goal for the maximization of shareholder’s value. On the other hand, countries under civil law systems from which OHADA draws its inspiration seems to have a stronger preference for a stakeholder based system. Thus, a comparison between OHADA and English law on shareholders and stakeholder’s interest will enable corporate participants to know the legal system which best protect commercial companies respectively. To achieve the said objective, we employed a content analysis approach. In this vein, this paper seeks to discuss the views of various authors on shareholders and stakeholders theory, brings out the possible balance between these conflicting terms and recommends some salient proposals to enhance these conflicting theories thus, protects corporate bodies.