Aprimary factor in assessing power in the institutional investor agency contract is that it is often not the only

contract among the parties. An institutional investor may be in two opposing agency contracts with a portfolio firm,
simultaneously acting as its principal and its agent. For example, an insurance company may be the insurance agent
to one of its portfolio firms, so the portfolio firm’s buyer power in the insurance contract might limit the insurance
company’s investor power in the ownership contract. The existence of two such contracts is most clearly the case for
pressuresensitive institutional investors, but other institutional investor types the dyadic contractual approach can be
applied to any complex phenomenon by thinking of it as a series of such contracts, for example, the firm as “a nexus
of contracts” (Fama & Jensen, 1983; Jensen & Ruback, 1983). Others have disagreed with this positionan d have
developed two models based on the belief that the dyadic contractual approach is insufficient for capturing the
parties and interests associated with ownership through financial intermediation.

Back in April SunTrust Bank had an information breach when a former employee took a list of 1.5
million customers' names, addresses, and possible account balances. While there are laws that
require SunTrust and CEO Bill Rogers to notify clients about such breaches, Mr. Rogers took it
one step further. Not only did he apologize and get law enforcement involved but he also provided
ALL SunTrust clients with free credit monitoring, whether they were affected by the breach or not.
Rogers did this for the stakeholders,SunTrust is a purpose driven company with a client centric
approach and they want their clients and employees safe and happy.
Hello Everyone,

I firmly believe that the principle of stakeholders affects the market climate rather than the
principle of control. Stakeholder theory is more concerned about the manner in which the
business is conducted i.e. how ethically or unethically the business is conducted, it says the
business should be conducted in such a way that there is always something in it for the people
who are directly or indirectly associated and affected by the business operations Because
according to this theory the organization wants to have and retain a strong hold on the business
world then it should take care of its employees, customers, people who supply raw materials and
so on, and should ensure added value in their professional and personal lives i.e. stakeholders
should be the primary concern. During India's last quarter recession era, Flipkart, a major e-
commerce company, did not fire any employee, did not increase rates, pursued stakeholder
philosophy, and defied a recession

Stakeholders are people who either know about the idea or have a personal interest in it. These
are the people who are actively involved in the project’s work, or who have something to gain or
lose as a result of the project. If you plan a scheme to add lanes to a highway, pedestrians are the
favorably impacted actors. However, before your project (with construction noise), and after
your project with far-reaching consequences (increased road noise and pollution), you adversely
impact people who live near the highway.

Managers are representatives of all owners according to the Stakeholder Theory. They have two
responsibilities:

 ensuring that no stakeholder's legal rights are violated

 Respecting the stakeholders' reasonable interests in making decisions

The aim is to balance profit maximization with the corporation's long-term ability to remain a
continuing concern. The basic difference is that the stakeholder principle requires the interests of
all stakeholders be taken into account even though this limits the productivity of the business.
Therefore I believe the theory of stakeholders has a greater impact on the business environment.
For example, the Cocoa Company prides themselves in involving their stakeholders in every
aspect of their business. They are committed to an ongoing stakeholder engagement as a core
component of our business and sustainability strategies, their annual reporting process, and their
activities around the world. They announced, “As active members of the communities where we
live and work, we want to strengthen the fabric of our communities so that we can prosper
together.” Cocoa engages with many of their stakeholder groups in a variety of formal and
informal settings across the entire Coca-Cola system. Their engagements range from meetings
with local, regional and national groups to ongoing dialogues with our bottlers, suppliers and
consumers.
 Anderson, V. J. (1991). Proxy voting: Fiduciary issues. In A.W. Sametz (Ed.),
Institutional investing: Challenges and responsibilities of the 21st century (pp. 278-
285).Homewood, IL: Business One Irwin.
 Andrews, E. S.,&Hurd, M. D. (1992). Employee benefits and retirement income
adequacy: Data, research, and policy issues. In Z. Bodie & A. H. Munnell (Eds.),
Pensions and the economy: Sources, uses, and limitations of data (pp. 1-30).
Philadelphia: Pension Research Council and University of Pennsylvania Press.