Can a Broader Corporate Purpose Redress Inequality?

Well before the Covid-19 pandemic, policymakers and scholars were focused on the debate over corporate purpose and the fragility of an economic system marked by stagnation and runaway inequality.  As a solution, many urged a shift from shareholder primacy (the credo that the main duty of corporate directors is to maximize wealth for shareholders) to a stakeholder approach, under which directors must create value for all constituencies of the corporation, including employees, customers, suppliers, and local communities. Such an approach – which promotes a seemingly radical change in how boards of directors make decisions – has historically appealed to two … Read more