Shareholder primacy
ESG & GovernanceThe view that a company's main purpose is to maximise value for its shareholders.
Shareholder primacy holds that managers should run the company in the interests of its owners, and that other goals should be pursued only where they serve shareholder value. It is often linked to the economist Milton Friedman. Supporters say it gives managers a clear, measurable goal. Critics say it encourages short-term thinking and ignores harm to other stakeholders. Many analysts take a middle path: stakeholder issues matter because they affect long-term shareholder value.
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