In the 21st century, the association between society and business is considered an
embedded social contract. Social issues are not only tangential to the business but vital to it. The
corporate managers who hold single dimensional view of maximizing shareholder value will not
survive, nor the will the companies they manage. Focusing on maximizing shareholder value can
lead managers to emphasis short-term business performance, while ignoring the long-term
opportunities and issues. Lynn Stout in her book “The Shareholder Value Myth” successfully
argues that shareholder primacy theory is not, in-fact, relevant to business decisions today by
providing evidence that shareholder primacy is not required by law; the theory mischaracterize
the corporation’s true economic structure, and it is not supported by the empirical evidence on
corporate performance. In my opinion, Stout provided enough evidence for board directors to
depart from the shareholder primacy theory, and accept more holistic view of running a
corporation which satisfy several objectives. According to Lynn Stout “satisfying” objectives
include, the ability of managers to serve the interest of many shareholders—including
shareholders who want to invest in long-term, who want company to hold its commitments to
employees, customers and want corporation to earn profit in a socially and environmentally
responsible fashion. Where managers can hold earnings to invest in marketing, safety procedures
and research and development that contributes to future growth of the corporation. In my
opinion, shareholder primacy theory is already lifeless as many corporations are now looking at
more than just making short-term profit for its shareholders and instead looking at being socially
responsible, to ensure sustaining long-term profits. Since 2000, shareholder primacy theory come
under the fire from business, legal and academic scholars. For example, as Stout mentioned, the
