University Finance Report: Shareholder Wealth, Stakeholders, and CSR

This finance report addresses the primary financial goal of a corporation, which is to maximize shareholder wealth, and explores whether businesses should operate strictly in shareholders' best interests or consider the welfare of employees, customers, and communities. The report justifies the answer by analyzing the alignment of interests between shareholders and stakeholders, emphasizing the crucial role of management in balancing these interests. It also examines the annual report of SembCorp Industries Limited, a Singapore-based company, to identify its corporate goals and contributions to corporate social responsibility (CSR). The analysis includes SembCorp's strategies for sustainable growth, its global CSR framework, and its community engagement policies, demonstrating how the company integrates CSR into its operations. The report highlights the importance of a strong relationship between the company and its stakeholders for sustainable income generation and long-term wealth creation, offering insights into the complex interplay between financial performance and social responsibility within a corporate setting. The report is properly referenced using the APA style.

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
In Response to Question 1...........................................................................................2
In Response to Question 2...........................................................................................3
Reference.....................................................................................................................6

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In Response to Question 1
Investments in the business is primarily done by the shareholders of the
company and shareholders are the one’s which generally look after long term growth
of the company in terms of rising profitability of the company. The management if the
company plays a crucial role in the overall application of various kinds of strategies
and plans for the company. The implemented decision made by the management of
the company will ultimately affect the dividends, profitability of the business and the
growth of capital in the business. It is crucial for the company that the management
of the company and the shareholders of the company have an aligned interest and
both the parties work in accordance with the long terms growth prospect of the
company (Sroufe 2018).
Shareholders and the stakeholders of a company play an important role in the
company. Alignment of interest is a crucial factor, which needs to be taken into
account. Every corporation should maintain an optimum balance between the
shareholders of the company and the stakeholders of the company. The companies
should have management policy, which incorporates the welfare of the company in
terms of common aligned interest (Lee & Lin, 2016). The employees, customers and
the community in which the company operates are the stakeholders of the company,
which plays a direct influential role in the management of the same. A shareholder is
a stakeholder of an company but a stakeholder is not necessarily a shareholder of
the company both the parties have their own varied interest and they play a
significant role in the operation of the company (Zhong, Wang & Yang, 2017). The
stakeholders and the relation between a companies’ plays a significant role and the
same is bounded by a series of factors, which make them reliant on each other.

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Companies should maintain a good relationship with the stakeholders of a company
so that the operations of the company runs smooth and the income generation by
the company is sustainable which helps the shareholders of the company earn better
and generate wealth in the long term. Companies should report to the shareholders
of the company by reporting all of the operating activities of the company. The
financial performance of the company and the other activities of the company in the
annual report and quarterly report presented by the company. The shareholders of
the company is primarily concerned with the profitability of the company and the
growth of wealth invested in the company. The stakeholders of the company on the
other hand view the services of the company and the quality of services provided by
the company for the betterment of the various stakeho0lders of the company. For
Instance, Higher wages, salaries, and better quality services are some of the
expectations of the customers and the employees of the company. Hence, it is
necessary for the management of the company to understand the importance of the
shareholders and the stakeholders of the company and the significant role they play
in the overall development of the organisation in the long term (Rendtorff, 2018).
In Response to Question 2
The SembCorp Industries Limited located in the Singapore serves the utility,
marine and urban development sector. The corporate goal of the company is the
sustainable growth and development of the company by achieving an overall
development of the company thereby creating value for the company. The company
engages in the growth strategies and explores various other services and products
where the company currently provides services to the consumers (Saxton, 2016). It
is essential for the company to serve the stakeholders of the company as they play a
crucial role in the development and the growth of the company. The company has

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several initiatives and strategies for decarbonisation, digitalisation and
decentralisation of the various kinds of services provided by the company (Annual
Report, 2018).
The company is having a global presence in various countries and understand
the role of company in the overall development of the community. The SembCorp
Company has a global Social Corporate Social Responsibility framework, which
includes the policy and principles the company should adhere to and follow the same
for performing the CSR activities of the company de (Jong & van der Meer, 2017).
The company follows the principles and policy, which helps them on fostering
environmental stewardship and improving the environmental condition and factors
under which the company operates. The Corporate Social Responsibility Framework
of the company helps the company in tracking and reporting the contributions done
by the company for the community. The framework policy and principles
incorporated in the Corporate Social Responsibility of the Company is well set in
accordance with the London Benchmarking Group. The company regularly conducts
its engagement and guidance with the Community Engagement Policy (Kumar et al.
2018). The study includes reviewing the social management plans conducted by the
company, which is well implemented by the company. The community has a primary
motives for improving the living standards and the quality of the life for the
community by providing them access to water, social welfare and better education.
The Corporate Social Responsibility of the company should be in well accordance
with the overall development of the community and helping them maintain a
sustainable environment under which the company operates. It is essential for the
company for engaging in such community development plans and programmes,
which helps the company, grow overall. The corporate social responsibility of the

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company is well in accordance thereby including necessary policies and principles,
which would help the company, serves the community in a better way.

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Reference
Annual Report. (2018). Retrieved from
http://www.sembcorp.com/ar/ar2017/assets/pdf/Sembcorp_AR17_Full.pdf
de Jong, M. D., & van der Meer, M. (2017). How does it fit? Exploring the
congruence between organizations and their corporate social responsibility
(CSR) activities. Journal of business ethics, 143(1), 71-83.
Kumar, A., Sinha, A., Arora, A., & Aggarwal, A. (2018). Impact of CSR activities on
the financial performance of firms. MUDRA: Journal of Finance and
Accounting, 5(1), 75-89.
Lee, C. C., & Lin, C. W. (2016). Globalization, political institutions, financial
liberalization, and performance of the insurance industry. The North American
Journal of Economics and Finance, 36, 244-266.
Rendtorff, J. D. (2018). Shareholders, management, and employees. Cosmopolitan
Business Ethics, 141(155), 15.
Saxton, G. D. (2016). CSR, Big Data, and Accounting: Firms' Use of Social Media for
CSR-Focused Reporting, Accountability, and Reputation Gain.
Sroufe, R. P. (2018). Value Creation for Stakeholders and Shareholders. In
Integrated Management: How Sustainability Creates Value For Any Business
(pp. 119-147). Emerald Publishing Limited.
Zhong, N., Wang, S., & Yang, R. (2017). Does corporate governance enhance
common interests of shareholders and primary stakeholders?. Journal of
business ethics, 141(2), 411-431.

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