The late Cornell Law professor Lynn Stout rose to prominence challenging the ideas that have dominated the past 40 years. In 2012, she took on the theory of shareholder primacy, which is the idea that public companies exist above all else to serve the needs of shareholders, and that if they make decisions with this approach, customers and employees will naturally benefit.
There's an argument to be made that this approach may have made sense in the 1980s, after the stagflation of the '70s, but Stout shows that it was inherently flawed and achieving the opposite result. Shareholder primacy can benefit investors in the short term, but it's an approach considering all stakeholders that creates lasting long-term value for investors, as well.
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