Open AccessThe Pandemic and Shareholder Value
Author(s) -
Călin Vâlsan
Publication year - 2021
Publication title -
symphonya
Language(s) - English
Resource type - Journals
eISSN - 1593-0319
pISSN - 1593-0300
DOI - 10.4468/2021.2.06valsan
Subject(s) - shareholder , corporate governance , capitalism , shareholder primacy , shareholder value , stakeholder , doctrine , normative , stock market , value (mathematics) , market economy , accounting , business , political economy , economics , political science , politics , law , finance , history , context (archaeology) , archaeology , machine learning , computer science
Shareholder value has driven corporate governance in North America for over a century. In the wake of significant financial crises and growing inequalities, corporate America decided in 2019 to embrace a more egalitarian model, in which all stakeholders matter equally. The brutal pandemic that wreaked havoc in the first half of 2020 exposed a startling disconnect between the real economy and the stock market. This disconnect is due to a gap between explicit and implicit corporate governance. While officially corporate America wants to convert to a new doctrine, the pandemic has shown that shareholder capitalism has remained the default model. Good intentions and official declarations are not enough in a system that has been specifically designed to serve the shareholders. If stakeholder capitalism is to succeed, it needs a clear normative content and perhaps a more radical reform of institutions and regulation.