For whom do companies toil?

Author: | Published: 28 Oct 2019

Goodwin Procter counsel David Bernstein asks how companies should prioritise the consideration of multiple stakeholder groups

Until very recently, it was widely accepted that the principal – some said the only – goal of a corporation should be to act in the best interests of its stockholders. This concept of stockholder primacy, which is generally credited to a 1970 New York Times article by economist Milton Friedman, has been supported by courts, by academics, and by most other commentators on corporate governance. It is based upon the idea that a corporation is owned by its stockholders, and that the responsibility of its executives, who are their employees, is to do what is most desired by them....