You can reject it all you want, but that is not only the law; it is the explicit promise of the companies in their IPO statements and it is also good economics. Accountability to everyone is accountability to no one, and efforts to add in “stakeholder” priorities somehow always end up being used to divert corporate assets to CEO compensation and entrenchment. You are more than welcome to set up a corporation according to the priorities you propose (hurray for capitalism and free markets!) and make that explicit in your offering statements, but you be at a competitive disadvantage because you will face a steeper cost of capital than the companies that promise to devote themselves to (long-term) shareholder returns — long term returns that must of necessity include paying attention to the needs of employees, customers, suppliers, and the community, which may not always be reflected in present value. Finally, let’s keep in mind who those shareholders are — as much as 70% of stock in large public companies is held on behalf of exactly the people you are trying to advocate for here — cops, teachers, office workers — via their pension funds and 401(k)s. Oh, and how would your proposed realignment of priorities affect my point about calibrating EPS targets in incentive compensation to reflect buybacks? My guess is not at all, which shows that either way, the current system is unfair and contrary to optimal economics for anyone but the insiders.

Movie critic, corporate critic and shareholder advocate, critic/editor at @ebertvoices @moviemom, and #corpgov #movies and editor at @miniverpress

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