Honors Program


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Ankenbauer, L. (2019). Activist Investors: A Corporate Social Responsibility Perspective on Hedge Fund Activism and the Need for Focus on All Stakeholders. Undergraduate Honors Thesis. University of Nebraska-Lincoln.


Copyright Lucy Ankenbauer 2019.


Corporate social responsibility (CSR) can result in distinctly different visions when instituted under the enlightened stakeholder theory or the shareholder maximization theory. The critical variation between these two theories is the principal party that businesses consider when instituting strategic decisions. Firms following the enlightened stakeholder theory will base decisions on all the various stakeholders of the company and develop policies which increase long-term firm value. Companies pursuing shareholder value maximization will consider all strategies through the eyes of the stockholders and how these individuals will be affected. Neither theory is more valid than the other, since many factors must be assessed. However, if companies are earnest about the CSR concept, they should give significant consideration to the impact that their decisions will have on employees, communities, and other stakeholders, as well as long-term value.

The extent to which business decisions affect all stakeholders should be at the forefront of company strategy. Prioritizing the desires of a select few over the needs of the majority, many of whom are significantly impacted by company policies, does not evidence the desire to improve society. Corporate social responsibility is an opportunity for firms to demonstrate their comprehensive focus on all affected groups. Corporate leadership is challenged to value the communities, culture, and all stakeholders over short-term profit, even without monetary gain from their actions. The enlightened stakeholder theory balances the needs of corporate constituencies, while pursuing long-term value creation and producing an optimal environment for sustainable CSR success.