Why We Should Preserve Shareholder Capitalism

In this testimony, I will make five main points: ) The shareholders whose interests are served by shareholder capitalism represent a broad segment of the population, which relies on the performance of the stock market for its financial well-being, including for retirement.

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FAQs about Why We Should Preserve Shareholder Capitalism Coupon?

Why is shareholder capitalism important?

1. SHAREHOLDER CAPITALISM The rationale behind Shareholder Capitalism is easy to spot. Firms need capital and the suppliers of capital seek returns on their investments. It follows, according to Shareholder Capitalism, that the interests of shareholders are preeminent in market-oriented economies. Pollution abatement by firms is costly. ...

What is shareholder-based capitalism?

Shareholder-based capitalism, with competition between profitmaking firms as its driving force, is the means by which society’s resources are used most productively for everyone. At the heart of the system is the accountability of companies to shareholders; the measure of success is their ability to maximise shareholder value over the long term. ...

Does stakeholder capitalism work?

For stakeholder capitalism to work, efforts to extend the time horizons of incentive schemes must be supplemented by metrics relating to the environmental, social and governance agenda. Shareholders should be given greater power to restrain takeover activity, which does not always deliver value. ...

Does shareholder capitalism create long-term value?

The distinction between short-term and long-term shareholder capitalism is significant. If short-termism is a problem, the solution is a greater focus on shareholder value, not less. There is evidence that many factors associated with long-term shareholder capitalism create long-term value for both shareholders and society. ...

How did the 1970s affect shareholder capitalism?

And the 1970s' interpretation of shareholder capitalism has resulted in short-term thinking, which had itself damaging effects on the planet and on society--think of exhaustion of natural resources, biodiversity, think of the financial crisis again. ...

Is'managerial capitalism' a threat to stakeholder value?

The bigger danger for stakeholder value is managerial capitalism, where unaccountable managers shrink the pie for both shareholders and stakeholders. ...