https://fee.org/articles/should-corporations-consider-any-stakeholders-other-than-shareholders/ This was written in response to this announcement https://www.businessroundtable.org/...-promote-an-economy-that-serves-all-americans Which basically was the announcement by 181 CEOs who make up the US Business Round Table that the focus on shareholder value needs to encompass all stakeholders. Basically the need for unending growth without thinking of the long term is bad for business. It caused a bit of a shake up and one of the responses was from the Foundation for Economics Education which lays out the very logical argument that the short term search for the highest profits without regard for the society in which they are earned has a short shelf life and a broader social responsibility is necessary for the long term stability of shareholder value. I think this is something that has been a long time coming (hard to sell products to the majority of the people who are saddled with record levels of debt and increasing poverty) and I'm happy to see it finally get here. What say you PF?
We have a rather massive perceptual problem and gap here. A corporation's first obligation is to the shareholders, because they have financed the company in the first place. All you need to do if you wish to benefit from that obligation is to become a shareholder. Anyone can do that. What constitutes a "stakeholder"? That is an unanswered question, one many people might claim for themselves- as a one-way street. Are employees stakeholders, where the company has an obligation to them? Or is their employment a two-way street, with different but equal obligation? Fact is that employers provide a massive number of benefits to employees, which are defined usually by law, are not negotiable, and are compelled. An employee provides- what ever level of output they choose to each day. That is a pretty random value which varies widely. Other than that- Nothing is compelled, required by law, or otherwise guaranteed to the employer. They are free to quit anytime they wish, with or without notice, and nobody will curse them, sue them or do anything other than pay them the balance due. If the business does poorly- nobody feels sorry for them, wants to pay them more so they can survive.... and it is always the fault of management. You never hear company failure blamed on the employees. Without question, our society like to think that what employers owe employees goes far beyond the agreement made, and count perceived expectations as obligations.... and that is a one-way street. If an employer fires someone- there can be a great many repercussions varying from attempt to label them slave drivers to calling them racist and anything else they can think of. Unions come in to get justice. Sometimes the labor department responding to complaints. Seems many employees think that they "own" their jobs, but at the same time- the employer does not own them in any way whatsoever. All good relationships are two-way streets. A business has to maintain a good relationship with customers to succeed, and that is accepted as what you must do to earn their business- because you don't own them, they are free to go to your competitor at any time for any reason. But a business is also a customer, and the employees are also in business- to sell their services. The business is in fact the employee's "Customer". Is it a two-way street? Hardly. Imagine what would happen to a business who treated it's customers the way many employees treat employers. Employers ARE NOT social service agencies. It's not their responsibility to see that employees can pay their bills, or are are in debt. It is their responsibility to honor the agreement made when hiring someone, and they do- and beyond that, mutual benefit may go further- but obligation ceases. Managing the employee's life affairs is the responsibility of the employee- and the fact that many do it very poorly is nobody's fault but their own.
