The prevalence of corporate social responsibility has been continually increasing over recent years. The debate of whether a business should act in a manner that furthers societal needs or if they should simply focus their efforts on maximizing shareholder value is of popular interest since it affects the fundamental structures of how a business will operate. One of the major influencing theories in favor of social responsibility is the stakeholder theory. The opposing viewpoint is the shareholder theory, which highlights that the sole responsibility for a corporation is to act in a way that maximizes profits. This thesis will outline the stakeholder and shareholder theories to gain a more comprehensive understanding of the debate and then offer a critical and philosophical analysis of shareholder theory to ultimately argue why the moral significance of a promise better promotes maximizing shareholder value.
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