December 03, 2024 | Book
  • Headline: Economic Policy After Shareholder Primacy
  • Intro Text:

    In Good Company, PERI researcher Lenore Palladino analyzes how, under the doctrine of “shareholder primacy,” corporations operate with short-term goals to deliver profits to shareholders. Palladino explains how corporations draw power from public charters. In return, companies are meant to innovate for the betterment of the society that supports them. In practice, that commitment to social well-being is neglected, with stock buybacks and top management bonuses prioritized instead. Palladino describes how modern corporations could play this intended role as a positive social actor, and offers tangible policy solutions that could make this alternative purpose a reality.

  • Type of publication: Book
  • Research or In The Media: Research
  • Research Area: Finance, Jobs & Macroeconomics
  • Publication Date: 2024-12-03
  • Authors:
    • Add Authors: Lenore Palladino
  • Show in Front Page Modules: Yes
  • Bottom Middle

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Good Company Palladino book coverIn an era of shareholder primacy, share price is king. Businesses operate with short-term goals to deliver profits to shareholders, enjoying stability (and bonuses) in the process. While the public bemoans the doctrine for its insularity and wealth-consolidating effects, its influence over corporate governance persists. Good Company offers an exacting argument for why shareholder primacy was never the right model to follow for truly understanding how corporations operate.

Lenore Palladino shows that corporations draw power from public charters—agreements that allow corporations to enjoy all manner of operational benefits. In return, companies are meant to innovate for the betterment of the societies that support them. However, that debt—increasingly wielded for stock buybacks and shareholder bonuses—is not being repaid. Palladino theorizes a modern corporation that plays its intended role while delivering social and economic good in the process and offers tangible policy solutions to make this a reality. Good Company is both an expert introduction to the political economy of the firm—as it was, as it is, as it can be—and a calibrating examination of how public policy can shape companies, and societies, for the better.

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