School of Law

Research Student: Taskin Iqbal

Enlightened Shareholder Value, Non-Member Stakeholders and Corporate Social Responsibility

Photo of Taskin Iqbal

Before the enactment of the Companies Act 2006, in which the directors' general duties have been codified, there was no determinative legislation that defined the scope of company law and governance in the United Kingdom. A clarification of what is expected of directors, in terms of in whose interests companies should be run, was an important aspect of the reform agenda. The result was the enlightened shareholder value approach. According to the enlightened shareholder value approach, directors must take into consideration a range of factors affecting the company's relationships and performance while ultimately promoting the shareholder interests. Section 172 of the Companies Act 2006, which is crucial to the advancement of the enlightened shareholder value approach, formally compels directors to have regard to stakeholder interests when making corporate decisions.

What is of great interest, with the possibility of wide effects, is whether the concept of enlightened shareholder value links to Corporate Social Responsibility (CSR). Enlightened shareholder value is the notion that companies should aim for shareholder wealth with a long-run orientation that pursues sustainable growth and profits based on responsible consideration of all the relevant stakeholder interests. It resonates with the notions of CSR because its idea of value is based on long-term sustainability and it acknowledges the importance of considering stakeholder interests in achieving that goal. A long-term perspective entails being attentive to the complete set of stakeholder concerns that might have the capacity to impact the business success of the corporation. Hence, values of sustainability seem to rely on acknowledgment of the importance of non-shareholder as well as shareholder interests.

The foregoing leads me to pose the following questions: Is the concept of enlightened shareholder value capable of promoting or assisting CSR? If it is, can it do so in a better way? If it is not, how could it be reformed in order to do so?

My research will also involve assessing whether implementing an enlightened shareholder value approach has had or would have any impact on the CSR practices of multinational corporations in developing nations.

I am hoping that my research will contribute to the field by demonstrating the vulnerability of non-member stakeholders, emphasizing the need for reform and offering some suggestions.


I completed my LLB from Queen Mary, University of London. After that, I completed the Bar Professional Training Course from City University London with an overall grade of Outstanding and got called to the Bar in July, 2013. I also did my LLM in Professional Legal Skills (Conversion) from City University London.

© Copyright Leeds 2018