The End of Shareholder Primacy?
— August 26, 2019
By A. Michael Spence
Corporate governance has been moving in this direction for some time, owing to a growing awareness that private-sector engagement will be necessary to address society’s most difficult challenges. Customers, employees, and investors have reinforced this trend by increasingly voicing their concerns about social issues. This emerging consensus is crucial for reconciling the multi-stakeholder model with corporate investors’ longer-term financial interests.
A similar evolution has occurred in the asset-management sector. The share of investors embracing “environmental, social, and governance” (ESG) criteria has been growing over the past few years, with many top asset-management firms helping to lead the way.
Read the full Project Syndicate article.
A. Michael Spence is a William R. Berkley Professor in Economics & Business.