The Excessive Ambitions of Stakeholder Ideology.
Saved in:
| Authors: | Epstein, Richard A. |
|---|---|
| Source: | Business Lawyer. Summer2022, Vol. 77 Issue 3, p755-771. 17p. 1 Color Photograph. |
| Subject Terms: | *Shareholder primacy, *Social responsibility of business, *Stakeholder theory, *Stockholders, *Corporate governance, Social values |
| Abstract: | Under the traditional shareholder primacy doctrine, corporate decisions were to be made with a single objective: the maximization of shareholder welfare. Paradoxically, that self-regarding view did much to maximize social welfare, because the corporate directors and officers knew full well that they had to do business with suppliers, customers, employees, and the public at large to achieve that end. The recent environment-social-governance model seeks to upend that model by seeking to make officers and directors answer to these many masters. That movement believes that shareholders want boards to take into account social values. Surely they do, but there is no agreement which values count and to what extent. The key advantage of the shareholder primacy model is it lets these divergent views be expressed at the shareholder level, so as to tamp down the negative effect on corporate performance in dealing with conflicts of interest on social issues. [ABSTRACT FROM AUTHOR] |
| Database: | Entrepreneurial Studies Source |
|
Full text is not displayed to guests.
Login for full access.
|
|
| Abstract: | Under the traditional shareholder primacy doctrine, corporate decisions were to be made with a single objective: the maximization of shareholder welfare. Paradoxically, that self-regarding view did much to maximize social welfare, because the corporate directors and officers knew full well that they had to do business with suppliers, customers, employees, and the public at large to achieve that end. The recent environment-social-governance model seeks to upend that model by seeking to make officers and directors answer to these many masters. That movement believes that shareholders want boards to take into account social values. Surely they do, but there is no agreement which values count and to what extent. The key advantage of the shareholder primacy model is it lets these divergent views be expressed at the shareholder level, so as to tamp down the negative effect on corporate performance in dealing with conflicts of interest on social issues. [ABSTRACT FROM AUTHOR] |
|---|---|
| ISSN: | 00076899 |
