The stockholder theory maintains that:

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Stockholder theory maintains that a company's primary responsibility is to maximize profits for its shareholders, and that managers are agents of the shareholders. This theory is based on the idea that shareholders own the company and therefore have the right to demand that managers act in their best interests by maximizing profits. This does not mean that managers can engage in unethical or illegal behavior to achieve this goal, but it does mean that their primary responsibility is to increase profits. This theory differs from stakeholder theory, which holds that companies have social and ethical responsibilities to multiple stakeholders, including customers, employees, the environment, and society as a whole.

The Stockholder Theory Maintains That