Corporate constituency statutes direct the board of directors to act in the best interests of the corporation,not just the interests of the shareholders,and to maximize corporate profits over the long term.

Question

Quizplus · Accepted Answer

Most states have enacted corporate constituency statutes,which broaden the legal objectives of corporations.Such statutes permit or require directors to take into account the interests of constituencies other than shareholders,including employees,suppliers,and customers.These statutes direct the board to act in the best interests of the corporation,not just the interests of the shareholders,and to maximize corporate profits over the long term.

Corporate Constituency Statutes Direct the Board of Directors to Act