Top of Mind
In the Financial Times, Martin Wolf writes: “Almost nothing in economics is more important than thinking through how companies should be managed and for what ends. Unfortunately, we have made a mess of this. That mess has a name: it is ‘shareholder value maximization.’” Suggesting that companies are tools for sustaining long-term commitments, he says that the short-termism often associated with maximizing value is undermining their purpose.
Yale Insights talked with Lynn Stout about the shaky legal basis for the primacy of shareholder value and the evidence that inordinate focus on shareholder value actually hurts returns.