Explicit Reconciliatory Mechanisms for Corporate Governance

There is increasing interest in the issue of reconciliation of the shareholder value perspective of corporate governance with a stakeholder value perspective. It is important for the reconciliatory mechanisms to be embraced by management and owners of firms. This paper explores two explicit reconciliatory mechanisms that could provide benefits to both shareholders and other stakeholders. The motivation for the mechanisms is grounded in financial valuation methodology. The paper does not advocate imposing any constraints, related to these mechanisms, on firms. It does advocate that firms analyze potential reconciliatory mechanisms with the same objectivity as it would use in a capital budgeting analysis