Wednesday, February 12, 2014

Meyerson: The myth of shareholder capitalism

I can testify that business schools teach Shareholder Value Maximization not as theory, not as an option, but as the only "responsible" method of corporate governance.  

However, as Meyerson correctly notes, corporations' making all their decisions based on SVM is an ideological choice, not a legal or even moral obligation.  

Nor is there proof that SVM is even in the best long-term interests of the corporation, or the shareholders. Indeed, great American companies like Coca-Cola, General Electric, Procter & Gamble and Ford Motor Co. operated profitably for decades before SVM came into vogue in the 1980s.

By Harold Meyerson
February 12, 2014 | Washington Post

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