Beyond Shareholder Primacy
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From the author of Capitalism at the Crossroads, a call to consciousness—and action—for individuals, organizations, communities, and nations.
Our current Milton Friedman–style "shareholder primacy capitalism," as taught in business schools and embraced around the world, has become dangerous for society, the climate, and the planet. Moreover, Stuart L. Hart argues, it's economically unnecessary. But there are surprising reasons for hope—from the history of capitalism itself. Beyond Shareholder Primacy argues that capitalism has reformed itself twice before and is poised for a third major reformation. Retelling the origin story of capitalism from the fifteenth century to the present, Hart argues that a radically sustainable, just capitalism is possible, and even likely, in our lifetime.
Hart goes on to describe what it will take to move beyond capitalism's present worship of "shareholder primacy," including corporate transformations to re-embed purpose and reforms to major economic institutions. A key requirement is eliminating the "externalities" (or collateral damage) of our current shareholder capitalism. Sustainable capitalism will explicitly incorporate the needs of society and the planet, include a financial system that allows leaders to prioritize the planet, reorganize business schools around sustainable management thinking, and enable corporations not just to stop ignoring the damage they cause, but actually begin to create positive impact.
—Paul A. Laudicina, Chairman Emeritus, A.T. Kearney; Founder, Global Business Policy Council
"We need a capitalist reformation. Shareholder primacy, the source code of capitalism, is a dead end. Stuart L. Hart shows us a path to upgrade the operating system of capitalism so that it is fit for a higher purpose than profit maximization."
—Jay Coen Gilbert, Cofounder, B Corporation movement; Founding CEO, Imperative 21
"Hart's compelling analysis of capitalism's history shows us that the past forty years of shareholder primacy are an outlier. We can and must transform the way we do business to build companies which thrive by serving their many stakeholders - including planet Earth. This is capitalism for the billions, not just the billionaires."
—Paul Polman, former CEO, Unilever; co-author of Net Positive
"This book is a call to action. It gives students and emerging leaders the blueprint they need to create a truly sustainable capitalism."
—Karen Johns, CEO, Net Impact
"An extraordinary exploration of business thinking that goes beyond the boundaries of profit and purpose. Leaders now have a path to achieve social and environmental goals, in addition to financial success. A must-read for executives, entrepreneurs, and anyone passionate about building a better, more sustainable future."
—Scott Tew, Vice President, Sustainability, Trane Technologies
"Successfully presenting a strong case would be enough to make Hart's work a compelling and thoughtful read. But he also presents a useful roadmap for making this all happen. This combination of the historical, theoretical, and practical makes this book an invaluable and provocative resource for anybody interested in building the future. Using clear and concise language, Hart makes his argument both accessible to the reader and documented for the scholar or student interested in further research. He makes the reader consider his subject in different contexts, outcomes, timelines, and consequences—quite a lot for any single volume to accomplish! Essential."—S. A. Schulman, CHOICE
