Why corporate purpose matters

Marc Fleurbaey (1, 2)

1 PSE - Paris School of Economics
2 PJSE - Paris Jourdan Sciences Economiques

After several decades in which shareholder value has been promoted as the mostrational goal a corporation should pursue, questions are being raised, doubts are arising, and criticism is becoming louder and louder. Among the alternatives to shareholder value that are emerging, the idea that managers should be attentive to the interests of all stakeholders is gaining ground. In this paper, three questions are ex-amined:• How could shareholder value be so successful? There must be economic mechanisms that make it a prominent option for the organization of the business sector.• What is the contribution of a productive firm to society and how can it be maximized? A firm does benefit many stake-holders, and it is possible to rigorously define the total benefit it brings to them.• How can the stakeholder approach be promoted and implemented concretely in a market economy that puts pressure on most firms to maximize profit rather than focusing on the total surplus generated?

Domaines: Sciences de l'Homme et Société

Marc Fleurbaey. Why corporate purpose matters. Global Solutions Journal, 2020, 5, pp.31-37. ⟨hal-03047373⟩