Shareholder Control in the Context of Corporate Social Responsibility — A Fundamental Challenge to the Modern Corporation

Shareholders are entitled to participate in the corporate decision-making and internal governance when it comes to determining corporate leadership or/and fundamental corporate changes. Accordingly, any discourse of corporate social responsibility (CSR) without a serious discussion on shareholders’ role will be incomplete at best and misleading at worst. This article is one of the first articles contributing to the CSR literature by critically examining shareholder vote in CSR activities, a subject that has not received the attention it deserves. The article finds that when shareholders vote against CSR, it would result in significant difficulties for companies to engage in CSR due to the shareholder control; when shareholders support CSR on the other hand, it would be equally problematic considering the rationale behind shareholder voting in modern corporations reliant on capital markets. The fundamental incompatibility of shareholder control and CSR activities exhibited in this article can serve as a new premise for future studies aiming for a more workable CSR framework