Shareholder Capitalism

It is an American-style capitalism that puts the shareholder (Shareholder) at the center of management. The focus of management is on maximizing shareholder value, and shareholders participate directly or indirectly in management.

Shareholder capitalism is a form that emerged as the joint-stock company—a corporate form for raising large-scale capital—appeared and combined with financial capitalists such as banks and investors. It was also at this time that corporate owners and professional managers (CEO) began to separate. The owner is the investor who invested the most capital, i.e., the shareholder.

The core of shareholder capitalism is the maximization of shareholder value. It is also described as the sole duty of management. According to Milton Friedman, a central scholar of the neoliberal camp, and the Chicago School—his fellow scholars—managers are agents of investors. Therefore, managers have an obligation not to misuse investors' funds and to use them as investors wish. What investors want is clear: to make a lot of money. It was also from this time that executive compensation became linked to shareholder value.

---

Topics: United States,Capitalism,Ideology,Korea discount
Category: Wiki/Economy