The Pandemic and Shareholder Value

The Pandemic and Shareholder Value

Blog Article

Shareholder value has driven corporate governance in North America for over a century.In the wake of significant financial crises and growing inequalities, corporate America decided in 2019 to embrace a more egalitarian model, in which all stakeholders matter equally.The brutal pandemic that wreaked havoc in the first half of 2020 exposed a startling disconnect between the real economy and the stock market.This disconnect is due to a Jordan gap between explicit and implicit corporate governance.While officially corporate America wants to convert to a new doctrine, the pandemic has shown that shareholder capitalism has remained the default model.

Good intentions and official declarations are not enough in a system that has been specifically designed to serve the shareholders.If stakeholder capitalism is to succeed, it needs a clear normative content and perhaps a more radical Cable Tidy Solutions reform of institutions and regulation.