Please paraphase and short this essay to thousand words. and the answer is appropriate?

1) Why do directors have an obligation to maximise shareholder value?

A company is a legal entity formed to conduct business activities. Its purpose is to maximize profits and create value for its shareholders. Shareholders are the owners of the company and appoint directors to represent their interests and make strategic decisions on their behalf. They provide capital and take on financial risk by investing in the company. They expect a return on their investment and rely on directors to make decisions that enhance the value of their shares. Directors have a legal obligation for managing the company to maximize shareholder value because of their fiduciary duty to act in the best interests of the company's shareholders. This obligation stems from the principle of agency theory, which states that managers are agents of shareholders and must act in their best interests.

So, what is shareholders expectations and shareholder value?

The obligation arises from the traditional view of corporations as profit-driven entities. Shareholder value refers to the financial returns and benefits that shareholders receive from their investment in a company. It includes factors such as dividends, capital appreciation, and overall profitability.

However, the concept of shareholder value has evolved to include social and ethical considerations, as shareholders now demand higher standards from corporations. Look to The Friedman vs. Freeman Controversy. Milton Friedman argued that the sole responsibility of a corporation is to maximize profits for its shareholders, while Edward Freeman proposed the stakeholder theory, which suggests that corporations should consider the interests of all stakeholders, including shareholders, employees, customers, and the community.

We can find out Shareholder value has evolved over time to encompass not only financial performance but also social and ethical behaviour. Shareholders increasingly demand higher standards of corporate responsibility and sustainable practices, e.g. ESG and C&S.

The Rio Tinto is another case, where shareholders expressed concerns over the company's environmental and social impact, illustrates this changing landscape. Shareholders are also signalling a desire for social impact alongside a financial return.

2) Does the company incorporate sustainability considerations and stakeholders interests into its values, mission, or purpose statement?

IKEA incorporates sustainability considerations and stakeholder interests into its values, mission, and purpose statement. The company has a long-standing commitment to sustainability, with initiatives such as sustainable sourcing, waste reduction, and renewable energy. This demonstrates the integration of sustainability considerations into its values and operations.

IKEA places a strong emphasis on sustainability and considers the interests of various stakeholders in its decision-making processes.

This is evident in its values, mission, and purpose statement. The company's mission is to "create a better everyday life for the many people," which includes a focus on sustainability. And also reflects IKEA seeks to improve the lives of people while minimizing its impact on the environment. Additionally, IKEA's values include "togetherness," which emphasizes the importance of collaborating with stakeholders, including customers, suppliers, and communities, to achieve sustainability goals.

IKEA aligns with Edward Freeman's stakeholder theory, which suggests that companies should consider the interests of all stakeholders.

Have a responsibility to all stakeholders in society and so they cannot focus only on increasing profits, but also environmental, social and ethical consideration. This is reflected in IKEA's focus on creating a better everyday life for people, implying a consideration for customer and community well-being.

this view is a more accurate picture of the modern business environment. Businesses do not act alone, and cannot survive for long on their own.

3) What types of stakeholders interests does the company address via its public disclosure?(5 marks)

IKEA addresses a wide range of stakeholders' interests through its public disclosures, including its sustainability report and other public communication channels.

Here are some examples:

3.1 Public disclosure:

IKEA provides detailed information on its sustainability initiatives, goals, and progress through its sustainability report. This report offers transparency and accountability to stakeholders, allowing them to assess the company's performance in areas such as environmental impact, social responsibility, and supply chain practices.

3.2 Mission statement:

IKEA's mission statement emphasizes its commitment to creating a better everyday life for many people is of interest to customers, employees, and communities, which implies consideration for the well-being and interests of its customers and communities.

By using the public disclosures, IKEA demonstrates the company is focus on creating value for stakeholders beyond just shareholders.

4) Explain, in your own words, how the company has performed on sustainability activities relative to its stated strategy and vision. Support the argument with evidence drawn from the latest sustainability report. (10 marks)

In IKEA 2022 Annual Sustainability Report, IKEA outlined its strategy and vision for sustainability. The company aims to enable customers to live a more sustainable life at home, drive the transition to a circular business model, design products that are circular by nature, and contributing to a fair and equal society.

IKEA has performed well on most of sustainability activities relative to its stated strategy and vision. The company has set ambitious sustainability goals, including becoming climate positive by 2030, using only renewable and recycled materials by 2030, and achieving zero emissions home deliveries by 2025. In its latest sustainability report, IKEA reports progress towards these goals, including investing in renewable energy, increasing the use of recycled materials, and introducing electric delivery vehicles. The company has also continued to work with suppliers to ensure that they meet its sustainability standards, including a focus on human rights and fair wages.

The report emphasizes IKEA's commitment to measuring sustainability and setting clear goals. The company tracks key performance indicators, such as energy consumption, waste reduction, and emissions. These metrics provide a basis for evaluating the success of the company's sustainability initiatives.

More energy-efficient at home:

IKEA's goal of enabling customers to be more energy-efficient at home is evident in its sustainability activities. The report highlights various initiatives such as offering energy-efficient appliances and promoting renewable energy solutions. For example, IKEA introduced solar panels in some stores and continues to expand their use. This aligns with their stated strategy of enabling customers to reduce their environmental impact. However, look through the Ikea sustainability document. it does not provide specific data or metrics to evaluate the overall success of this goal.

Waste reduction:

Waste reduction is a significant focus for IKEA. The report highlights efforts to reduce waste and increase recycling rates. And finally achieve zero waste to landfill by 2030. IKEA's transition to mattresses with recycled or renewable foam is an example of concrete action taken to address waste-related challenges. The business is dedicated to employing sustainable resources in its goods, such FSC-certified wood. Also, it wants to only buy cotton from sustainable sources. 98% of IKEA home furnishing materials are made from renewable, recyclable or recycled materials.

Today, more than 50% of our products are delivered directly from suppliers to our stores, which means less vehicles involved. Water saving design like pressure-compensating aerator is standard across the whole IKEA range of faucets and showers. This reduces the amount of water coming out by up to 50% in some bathroom faucets.

Reducing food waste:

IKEA has made progress in reducing food waste in its restaurants. The report states a goal of reducing food waste by 50% compared to the financial year 2017. In Sep 2022, Ingka Group, the largest IKEA retailer, today announces it has reduced food waste by 54% in its IKEA stores. A significant milestone in the fight against food waste, This achievement combined with the right measurement tools, the Winnow vision to automate food waste management with AI, demonstrates the company's commitment to fight against food waste and meet the Sustainable Development Goal to halve food loss and waste by 2030.

5) Provide recommendations as to how the company might improve its sustainability outcomes. In doing so, students should justify recommendations with evidence that indicates the possible need for improvement. (10 marks)

IKEA has a strong commitment to sustainability and has made significant progress towards its sustainability goals. While there is still room for improvement, particularly in the areas of supply chain management and product design.

To improve its supply chain management, IKEA could increase its monitoring and auditing of suppliers to ensure that they are meeting its sustainability standards. This could include conducting regular audits of supplier facilities and providing training and support to suppliers to help them meet sustainability requirements.

Additionally, IKEA could work with industry partners to address issues such as forced labor, particularly in its cotton production and ensure that its supply chain is free from unethical practices.

Another area where IKEA could improve its sustainability outcomes is in its product design. While the company has made progress in using renewable and recycled materials, it could do more to design products that are easier to repair, reuse, and recycle. By designing products with a focus on circularity, This can be achieved through innovative design, durable materials, and effective quality control processes. IKEA could reduce waste and minimize its environmental impact.

IKEA commit to reduce waste, But when we look through the Ikea sustainability document. there's very little measurement on how much waste it actually produces. They don't even keep records of how long their products survive with customer. the recommendation I personally would give Ikea is that they need to collect better information. ask them how long the they keep their furniture?

Ikea wants to reduce waste and become a circular company (said in sustainability report p17). Maybe Ikea can ask the customer to deliver the product back, and then Ikea should be able to sort out the recycling. and also when they're sourcing materials. make sure that the quality is good. But at this point there's no evidence that suggests that Ikea does offer any recycling on premises

By implementing these recommendations, IKEA can further improve its sustainability outcomes, aligning its actions with its stated strategy and vision.