185. Do companies exist for the benefit of their shareholders?
No. Or not only. The title summarises a common view which informs most company management nowadays. The fundamental driver of a company is to maximise shareholder value, simplistically equated to profit or, rather, dividend or yield. This is a misconception. Companies are not only a vehicle to grow shareholder wealth. They are an environment where workers spend a significant part of their day. They are actors in a community, contributing to its dynamics and impacting its environment. They are entities integrated in society and their objective must be maximising the benefit to their stakeholders. These are, in my order of importance, employees (since they spend good part of their lives there and rely on them for their livelihood), customers, suppliers, shareholders, local community and wider community. Shareholders demand continuously growing returns, which drives managers to underpay employees and suppliers, shortchange customers and community. In the midterm, it is a recipe for failure
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