To actually create shareholder value, put customers before shareholders.

Modern capitalism can be broken down into two major eras. The first, managerial capitalism, began in 1932 and was defined by the then-radical notion that firms ought to have professional management. The second, shareholder value capitalism, began in 1976. Its governing premise is that the purpose of every corporation should be to maximize shareholder wealth. If firms pursue this goal, the thinking goes, both shareholders and society will benefit.

Both eras were heralded by an influential academic work. In 1932, Adolf A. Berle and Gardiner C. Means published their legendary treatise, The Modern Corporation and Private Property, which asserted that management ...

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