Shareholder Value Bites the Hand That Feeds It

11 Pages Posted: 4 Nov 2019

Date Written: October 10, 2019

Abstract

Shareholder primacy has many victims, including employees, the environment and the communities where corporations operate. Surprisingly, it harms its intended beneficiaries, shareholders, as well, according to a number of studies.

By contrast, studies show that sustainable management -- which explicitly takes environment, social and governance (ESG) factors into account -- benefits shareholders, as well as other stakeholders, by improving companies’ profitability and stock market price.

In other words, doing the right thing is not only good for the world but also good for the wallets of corporate owners and investors.

Keywords: Shareholder, Shareholder Value, Shareholder Primacy, Shareholder Value Maximization, Milton Friedman, Michael Jensen, ESG, Sustainable investing, Sustainability, Jack Welch, Private Equity, Impact Investing

JEL Classification: D46, D60, D63, D64, E61, G11, G14, G18, G32, H00, K22, N22, P11

Suggested Citation

Swanson, Brad, Shareholder Value Bites the Hand That Feeds It (October 10, 2019). Available at SSRN: https://ssrn.com/abstract=3476834

Brad Swanson (Contact Author)

Developing World Markets ( email )

750 Washington Blvd
Stamford, CT 06901
United States
203 655 5453 (Phone)

HOME PAGE: http://www.dwmarkets.com

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