What responsibility do corporations have to society (if any)? How should they balance environmental, social, and governance factors? Here at Bite-Sized Business Law, we’ve already covered corporate social responsibility and environmental social governance (ESG) from a few different perspectives. Today, we unpack a straightforward defense of shareholder primacy, or in other words, the idea that pursuing any corporate aim that does not maximize shareholder value conflicts with the legal and practical purposes of a corporation. Here to unabashedly defend this concept is one of the foremost American experts in corporate governance and the William D. Warren Distinguished Professor of Law at UCLA School of Law, Stephen Bainbridge. Stephen is a business law professor and one of the most cited scholars in corporate governance law. His new book, The Profit Motive, argues that shareholder wealth maximization is not only “required by law, but what the law ought to require.” In this episode, Stephen addresses questions surrounding corporate purpose using historical, legal, economic, and social perspectives and explains why he believes that shareholder primacy is inevitable. To find out how we can reconcile ESG initiatives with shareholder value creation, tune in today!
Key Points From This Episode:
Links Mentioned in Today’s Episode:
