More importantly, who cares? Before we demolish the idea, let's explain it a bit.
Shareholder primacy means that in corporate affairs, executives manage the business principally for benefit of shareholders. The main purpose of the company, then, becomes to create value for investors.
Seems obvious to us investors. But, for decades, scholars and practitioners have debated the purpose of a corporation. In some recent accounts, the debate has boiled down to the difference between "shareholders" and "stakeholders".
One current version of this debate extends to what, exactly, corporate law demands of executives and directors. More specifically, does corporate law require them to maximize investor value? Does it create a formal duty to increase a public company's share price?
We think the question doesn't really matter, and show how why in a current blog post.
