Certified Environmental Social and Governance Analyst (CESGA) EFFAS Practice Test 2025 - Free CESGA Practice Questions and Study Guide

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What are the principles of stakeholder theory?

Focus exclusively on shareholder profit

All stakeholders should be considered, not just shareholders

The principles of stakeholder theory emphasize the importance of considering the interests and well-being of all stakeholders involved with a company, rather than focusing solely on shareholders. This approach recognizes that a company's actions can significantly affect various parties, including employees, customers, suppliers, the local community, and the environment. By prioritizing the interests of all stakeholders, businesses are encouraged to engage in more sustainable and responsible practices that benefit society as a whole.

This perspective contrasts sharply with models that prioritize only shareholder profit. Stakeholder theory advocates for a more holistic view of business operations, encouraging companies to balance the needs and expectations of different groups. This inclusivity can enhance corporate reputation, foster customer loyalty, and create long-term value, ultimately leading to better business outcomes for everyone involved.

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Investment profits are prioritized over community needs

Ignore public interest in business decisions

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