- 15 Marks
FM – Nov 2017 – L3 – Q5 – Corporate Governance and Financial Strategy
Identify stakeholder financial objectives and discuss methods to incentivize directors to maximize shareholder wealth.
Question
Private sector companies have multiple stakeholders who are likely to have divergent interests.
Required:
(a) Identify FIVE stakeholder groups and discuss briefly their financial objectives.
(10 Marks)
(b) Explain ways in which companies’ directors can be encouraged to achieve the objective of maximisation of shareholders’ wealth.
(5 Marks)
(Total 15 Marks)
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