How Investors Can Drive The Shift From Shareholder Primacy to Stakeholder Capitalism
— November 8, 2018
By Andrea Armeni and Tensie Whelan
In order to meet demands for short-term stock price performance, Company USA drastically reduces its biggest cost – labor. It offshores some labor and outsources other labor to contract workers, to whom it pays no benefits. It automates as much as possible, which gives it more tax breaks than hiring labor. It takes the money it saves and buys back shares, which momentarily increases its stock price and shareholder returns (and also the President’s bonus).
Read the full ImpactAlpha article.
Tensie Whelan is a Clinical Professor of Business and Society and Director of the Center for Sustainable Business.