More on Corporate Stakeholders and Shareholder Primacy
In my last post I commented on the Harvard Shareholder Rights program’s misguided effort to eradicate classified boards of directors. Today, theRacetotheBottom commented on a paper by Margaret Blair, “Corporate Law and the Team Production Problem“, challenging the dominate scholarly view over the last few decades that the sole purpose of a corporation is to maximize value for its shareholders. According to Blair: “Prominent advocates of shareholder primacy such as Michael Jensen, Jack Welch, and Harvard’s Lucian Bebchuk have backed away from the idea that maximizing share value has the effect of maximizing the total social value of the firm…”. Perhaps the old fashioned idea that employees of business entities aren’t merely serf’s working solely for the shareholders, and the communities where corporations reside aren’t merely hosts for corporations to leech until they are sold or liquidated, is becoming popular again.