Shareholders Do Not Own the Firm
In brief: Contrary to popular myth, shareholders do not own the firm. Similarly, managers and directors do not have a fiduciary responsibility to maximize shareholder value. Instead, the firm should be run in the interests of its broad range of stakeholders.
As argued in Principle 1, for-profit firms are the most effective way we have devised to advance social wellbeing. As firms are part of society and society is constructed of multiple components, including firms, the interests of the firm and the interests of society are inextricably interwoven. In other words, business is not a zero-sum exchange, but an ongoing reciprocal relationship between the for-profit firm and its various invested constituents. ...
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