Given his positive evaluation of the morality of hostile takeovers, Professor Barry must share some sympathy with those who seek to diminish the entrenched power of the self-perpetuating managerial elites who abuse existing corporate governance structures for their personal gain. The price mechanism alone surely cannot be invoked to justify the staggering growth in compensation packages for top corporate management. So let's get real. Shareholders are not the only interests currently being served by those who control corporate decision-making, nor do the decisions that are made consistently follow the logic of increased shareholder wealth. Without some attempt to accommodate the real interests of stakeholders, corporate management is likely to face increased participation of stakeholder groups as stockholders.
Stakeholders are neither stupid nor impotent.
They can easily mimic the ICCR's successful strategy of mobilizing religious communities to use their investment portfolios for leveraging various corporate social responsibility agendas through proxy battles and other insurgencies at annual shareholders' meetings. Top management is usually willing to negotiate with those who organize such efforts precisely because the one thing they abhor above all else is bad publicity. One way or another, management will be forced to perform its fiduciary duties. Though many business ethicists make a direct and explicit linkage between stakeholder theory and the movement toward corporate social responsibility, there is no logical connection between the two. Nor does stakeholder theory justify the idea of corporate social responsibility.