Should Companies (and Managers) Work for Shareholders?

business_ethics_highlights_2This short piece is essential reading. It succinctly sums up the challenge posed by the question of ‘shareholder primacy’ — that is, the question of whether “shareholders come first” from the point of view of corporate objectives, and just what that means. >>>

LINK: Should Companies Maximize Shareholder Value?

…Who owns and controls a company? The formal answer of economists has been that shareholders own and control a company. This is simplistic. Shareholders do not own companies in the normal sense of ownership. They cannot walk into the property they ‘own’ and demand that ‘their’ employees do certain things, as they could in a shop or a farm that they owned. Indeed, all they can do — and, for the most part, only with difficulty — is to help change management by voting or selling their shares. This is a highly qualified form of ownership….

What do you think?

Brought to you by:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: