Can shareholder-owned corporations maximize profits without harming their stakeholders?
This was the central question of the first QUASI (Questions and Unanswers About Social Innovation) webinar. The ‘Yes’ side argues that 1) firms are conditioned to avoid harming stakeholders, 2) firms with the best stakeholder relations offer higher overall value, and 3) a shareholder primacy view of business that puts “profits above people” is old news and no longer accepted business practice.
The ‘No’ position argues that we live in a golden age of corporate wrongdoing in which corporate actions provide an endless buffet of products and practices that make the world worse. The bright spot is that public corporations appear to be mostly doomed as an economic vehicle in the US.
‘It depends’ emphasizes the idea that there is actually no such creature as a shareholder-owned corporations, because the corporation actually “owns” itself. Shareholders merely own a legal financial instrument with a limited set of rights and virtually no responsibilities.
Finally we ask ‘Well, so what?’ suggesting that perhaps the question itself needs to be reframed because it relies on a set of questionable assumptions about the ownership and nature of the firm, business as usual continuing, ethical responsibilities and practices, company purpose, flawed performance metrics, and the reality that companies—and all of us—are actually stakeholders to Gaia.