From shareholder primacy to stakeholder capitalism

For many years, the conventional wisdom held that corporate executives should focus on maximizing shareholder value, and this goal was reinforced by compensating executives with stocks.4 However, these strategies have a number of flaws. They create a bias towards short-term results (such as quarterly earnings) at the expense of longer-term prioriti

A company’s health—not its shareholders’ wealth—should be the primary concern of those who manage corporations.

Orange holds that for-profit companies should operate with a shareholder perspective. Management’s primary (some people claim its sole) obligation is to maximize profits for investors. Adam Smith‘s “invisible hand” is often invoked to explain how this benefits all stakeholders in the long run. Green Organizations insist that there should be no such