When leaders of corporations make decisions, they are necessarily, if only implicitly, expressing preferences about tradeoffs.For example, a decision to invest in growth, which might be better for longer-term shareholders, can often come at the expense of a higher dividend, which might suit short-term investors; a choice to pay higher wages and make employees happy and allow for price reductions, the benefits of which go to customers, impossible; and so on.
So whose interests should corporate leaders put first when making these decisions? My vote: the survival of the corporation itself. Not shareholders, not stakeholders, not customers, not society — not even profits. The corporation’s survival should come first.
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