This article makes a good contribution towards increasing discussion about three of the myths about public corporations. The first myth is that corporations are private enterprises. When the founder of a business sells shares of the corporation to the public it is no longer a private business. it is regulated as a publicly held enterprise. The operation of the business is turned over to managers who are employees of a business that is owned by a multiple number of shareholders who play little role in operating the business.
The second myth is that the primary purpose of the corporation is to maximize shareholder value. Prior to the development of that myth in academia, corporations were managed to provide benefits to a larger number of stakeholders. These stakeholders have invested their time and money in the corporation and they cannot easily exit by selling their shares when the management makes bad decisions.
The last myth is that executive compensation is based upon the limited supply of talented managers and the strong demand for the services of these rare individuals. Corporate boards, that have been selected by management, make the compensation decisions. The get a lot of help from compensation consultants who have selected for their expertise in justifying compensation policies. This book by a Harvard professor does an excellent job of destroying that myth by reporting on how corporate boards select CEO's.
Each of these myths would be worthy of a book. This is good start on the topics for those who are interested. There are lots of good reasons for holding publicly held corporations more accountable to their other stakeholders. Together, the decisions made by a relatively small number of corporations determine the bulk of economic activity in the global economy. They are not accountable to the public for the broad impact of their decisions.
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