Corporate Governance Protects Stakeholder Rights and Interests: An Agency Theory Perspective

Abstract

The article applies a comprehensive method to defend stakeholders' rights and interests through corporate governance (CG). It explores whether boards of directors who effectively represent shareholder interests also protect the interests of the organization's other stakeholders. It explores how corporate governance should be established for already operating corporations, especially in line with arbitrary fairness and impartiality requirements. The notion of corporate governance (CG) is defined and clarified via the use of the Organization for Economic Cooperation and Development's (OECD) governing principles and guidelines. Nigeria, the United States, and the United Kingdom, according to reports, developed their corporate social responsibility (CSR)-oriented CG principles in consultation with the OECD principles and other sources of CG rules and principles, such as the Companies and Allied Matters Act, the Investment and Securities Act, and numerous others. It asserts that the concept of corporate governance (CG) is applicable to corporate businesses worldwide by emphasizing the importance of defining the rights and responsibilities of various corporate stakeholders, such as board members, managers, and shareholders, as well as decision-making guidelines and processes. Furthermore, this enables the organization's objectives to be established, the road to reaching them determined, and outcomes monitored. While acknowledging that corporate governance (CG) is an important problem for organizations, the paper contends that because an organization cannot please all stakeholders, it is preferable to create a compromise between accomplishing organizational aims and those of the stakeholders.