Shareholder primacy is a theory in corporate governance

Corporate governance

Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...

 holding that shareholder

Shareholder

A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....

 interests should be assigned first priority. A shareholder primacy approach often gives shareholders power to intercede directly and frequently in corporate decisionmaking, through such means as unilateral shareholder power to amend corporate charters, shareholder referenda on business decisions and regular corporate board election contests. The shareholder primacy norm was first used by courts to resolve disputes among majority and minority shareholders, and over time this use of the shareholder primacy norm evolved into the modern doctrine of minority shareholder oppression

Shareholder oppression

Shareholder oppression occurs when the majority shareholders in a corporation take action that unfairly prejudices the minority. It most commonly occurs in close corporations, because the lack of a public market for shares leaves minority shareholders particularly vulnerable, since minority...

. The doctrine of shareholder primacy is sometimes criticized for being at odds with corporate social responsibility

Social responsibility

Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the...

. James Kee writes, "If private property were truly respected, shareholder interest would be the primary, or even better, the sole purpose, of the corporation."