While we should all laud the recent proclamation by the US Business Roundtable asserting that stakeholders other than shareholders should be considered in corporate decision-making, I am sceptical that it will bring about meaningful change.

Shareholder value maximisation theory long ago gained primacy in US corporate law. Risk-averse boards will continue to be guided by fear of personal legal liability. It will take change, particularly in the Delaware courts, to make sure that board decisions balancing non-shareholder constituencies with notions of shareholder value can’t be second guessed.

Todd H Baker
Senior Fellow,
Richman Center for Business, Law & Public Policy,
Columbia University, US

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