A One-Legged Stool
How Shareholder Primacy Has Broken Business (And What We Can Do About It)
Have you ever wondered if business needs to be so...unbalanced?
Is putting shareholders above everyone else the only way for private enterprise to be successful? Is that "just the way it is?"
The short answer is "no."
Before "shareholder primacy" took hold in the 1970s, investors weren't more important than other stakeholders. Companies balanced the interests of all the legs of the corporate stool - customers, employees, communities, and shareholders - and everyone's life got better.
So, what happened? How did we get to today, where "maximizing shareholder value" is seen as the panacea for all the world's ills? And, more importantly, what's the path forward that allows business to profit by applying its significant resources to solving society's problems, rather than making them worse?
We all rely on the stool of business to elevate our lives. Let's fix it before it collapses.