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Who owns listed firms?

The common refrain that firms exist solely to maximise shareholder value is a tired cliché. 

This solitary prescriptive path to corporate glory came into vogue and created a hum of excitement in the early 1970s. The pioneering proponent of this view, Milton Friedman; an influential economist, argued, “there is one and only one social responsibility of business; to…engage in activities designed to increase its profits.” This ‘mantra’ is now a subject of debate, on the one hand between economists and lawyers, and on the other, between executive management and shareholders.

Inquisitive brains are back in vogue, questioning the rationale for Friedman’s doctrine. The horizons of corporate leadership have opened beyond shareholder-value-thinking (SVT).  The bar would be too low if SVT served as the sole measure of performance. The centre of gravity has rightfully shifted towards the creation and sustenance of the intention-fueled humanitarian principle of shared value. In progressive companies, the delicate balancing of the interests of employees, creditors and customers with wealth creation has assumed prominence. Liberal leaders with minds untrammeled by convention have embraced altruistic virtues and challenged the orthodox body politic. 

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Editor's Comment
Celebrate responsibly, put safety first this holiday

“Safety first is safety always”– Charles M HayesAs most people begin travelling across the country to spend the President’s Holidays with family and friends, there is every reason to embrace the joy and togetherness that this period brings.While holiday periods bring joy, they are sadly often accompanied by a rise in road accidents, violent incidents and other avoidable tragedies. Too often, families that set out to celebrate together end...

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