In order to attract that investment, we need to earn profits so that the investors are getting a return on their investment. If the businesses are not allowed to be profitable by configuring themselves to be more productive with in some cases it might be fewer people, in other cases, hopefully it will be more people. They, in turn, elect members of the board of directors here at the annual meeting to look out for shareholders' interests. Finance Professor Robert Glauber has served on various boards. What I teach in class and what the law says is directors are supposed to act on behalf of the shareholders.
Directors are really very straightforward and simple people.
They can only make decisions that are in the interest of one group, and if they focus on that group, they'll do that well. If you ask them to focus on a whole bunch of different stakeholders, they're going to get it wrong. In fact, Glauber argue, managing strictly for the shareholders addresses an age-old issue of corporate capitalism. The problem was that you had corporations owned by a large number of shareholders, none of whom could reach out and control the senior management. Managers were doing whatever they thought they wanted to do, building big empires, riding around in big limousines.