Could I have possibly been right about not pandering to Shareholder Value…?

As recently as June, I posted some of my convictions regarding Shareholder Value. I said then that Corporations are throwing away fundamental values of integrity, providing a viable living for employees, and most of all ‘having fun at what we’re doing’ because of the almighty pursuit of an extra buck.

I still assert that if a Corporation can afford to stop focusing on squeezing every…single…dime… out of the organization, then suddenly fun will creep into the equation, and people will actually work harder at their jobs because there is a satisfaction interwoven with the job when a company has the integrity to run a little thick. Suddenly there comes a focus on the satisfaction of doing better instead of sweating for not doing enough.

And this morning, the Washington Post has a really good article which says a lot of what I’ve been saying for years. 

The key is to tell investors up front that they should never be able to count on financing their yachts from investments in the Company stock. Instead, they need to see it as a way to feel good about supporting values that uphold human, and yes, Christian, ideals: never sacrificing integrity for the sake of a profit, helping those who are in need in a way that allows them to help themselves, forming a community of people who get together as a single body to work for an ideal; and most of all – we’re in this to have fun, and to deliver to our Customers what they truly want, in a way that’s responsible to our planet, our country, our employees, and our God.

And guess what – the Post has a series of stunning conclusions in the story:

The real irony surrounding this focus on maximizing shareholder value is that it hasn’t, in fact, done much for shareholders.

If you are the sole proprietor of a business, do you think that you can motivate your employees for maximum performance by encouraging them simply to make more money for you? Of course not. But that is effectively what an enterprise is saying when it states that its purpose is to maximize profit for its investors.

… it is no coincidence that companies that have maintained a strong customer focus — think Apple, Johnson & Johnson, and Procter & Gamble — have consistently done better for their shareholders than companies which claim to put shareholders first. The reason is that customer focus minimizes undue risk taking and maximizes reinvestment over the long run, creating a larger pie from which everyone benefits.

Sounds a lot like what I’ve been shouting into the wind for years. Ever since the mid-90’s. Nice to hear it come back as an echo, even if it has taken a long time.

And I hope that we finally get to the point where we can say:

Gordon Gekko, go sell ‘greed’ somewhere else; it’s not appreciated here.


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