Video Labs: Chapter #3-Business Governance, Ethics, and Social Responsibility

Corporations and Limited Liability


This video will explain how shareholders of corporations have limited liability. Shareholders of a corporation have limited liability when the corporation is legally charged with negligence. Partnerships and sole proprietorships, on the other hand, would generally be fully liable, or at least much more than shareholders of corporations. This is because sole proprietorships and partnerships are conduit entities, whereas corporations are separate legal entities. The maximum loss a shareholder could incur in a corporation is the amount invested, whereas the sole proprietor or partner could lose ownership of their business plus personal assets in a lawsuit. Run Time: 9:57

Social Responsibility Perspectives: The Shareholder and Stakeholder Approach


This video compares and contrasts the shareholder approach and the stakeholder approach to corporate decision making. The shareholder model is defined as a corporation only having a fiduciary responsibility to maximize profits for its shareholders. The stakeholder model is defined as a corporation having a social responsibility to satisfy multiple stakeholders in addition to seeking profits. These are two opposite approaches and most corporations fall somewhere in between these two approaches. BP’s oil spill is an example used of how not having a stakeholder approach could hurt the company financially in the long run. Run Time: 7:43

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How Theranos Pulled Off Its $9 Billion Scandal

This video clip is a breakdown of what happened with the company Theranos. It highlights the unethical behavior that companies sometimes engage in, and how they can seek to mislead investors and the public.  Run Time: 8:14