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The cult of shareholder value is all about EARNING MONEY THIS QUARTER NO MATTER WHAT AT THE EXPENSE OF ALL ELSE (including ethics, legality - at least in terms
by JohnTHaller 11y ago
The cult of shareholder value is all about EARNING MONEY THIS QUARTER NO MATTER WHAT AT THE EXPENSE OF ALL ELSE (including ethics, legality - at least in terms of expense for fines/lawyers, fairness, product quality, etc). In the long run, it's a destructive force of the market, but it's the way nearly all publicly-held companies go eventually. At least those that are majority owned by the public.
- venomsnake 11y agoA solution to shortermism - make sure that stock that has voting rights cannot be resold or optioned more than once per 2 years.
- golergka 11y agoIt is also a good application of single responsibility principle, which is widely regarded as a good thing in software development, because it helps build systems that are easy to worry about. You want some other values to be upholded to certain values? Create mechanisms that will translate these values to the value this component of the system is interested in. Actually, it's already done quite succesfully with regulation and fines. If you want one component of the system to care about a lot of different variables, on the other hand, that's an easy way to create an awful, bloated system where every component is supposed to take care about everything, and in the end, nothing works.
- cft 11y agoThis came from the separation of ownership from control, that happened in many American public companies in 1960s. In 2008 for example Ford did not receive bailouts, and it still has significant Ford family ownership, unlike GM (but like Toyota incidentally).