Re:Statement on the Purpose of a Corporation
by bdamm on Monday August 19, 2019 @12:40PM
(#20739293)
The statement is great, and meaningful. Hopefully it's a shot of ethics into a somewhat moribund patient. However there are competitive forces also at play. A company that doesn't boost it's stock price as much as its competitor is at a competitive disadvantage because now it has access to less capital.
If we're really lucky, someone has found a way to objectively value the goodwill generated by taking good care of their customers, employees, and partners. Or perhaps that already existed, and the metric has moved into favoring good behavior for some reason, so these CEOs are agreeing to move together into this new operating theater so they can take maximum advantage of their existing customer base and spend less on churning customers.
Re:Statement on the Purpose of a Corporation
by skybrian on Monday August 19, 2019 @03:41PM
(#20741080)
It seems like you're approaching this as if businesses are maximizing a function, and that doesn't seem to be how managers make decisions in most places? Competition is important but there are a wide variety of strategies and they are already weighing intangible tradeoffs without necessarily quantifying everything.
The pursuit of shareholder value is more of a cultural norm. Top management and many employees have stock or stock options, so naturally everyone is happy when the stock goes up. Increasing revenues and profits are almost always rewarded. This is all justified as aligning employees' interests with shareholder value.
The article shows that some companies might be moving away from this a little bit. In practice, employees are people who can be motivated by beliefs other than what personally benefits them, and the statement provides a bit of philosophical cover for that. But I expect that growth will continue to be considered good.