Interesting essay argues that:
Right on its 20-year schedule, the old debate over the proper purpose of the corporation has recently been revivified in books, articles, and blog posts in as dire a tone as ever. The spectacular corporate failures on the part of firms like Enron, Lehman Brothers, and the quasi-governmental Fannie Mae, accompanied by equally spectacular government bailouts of failed firms, have fueled the recent uproar. A sense that someone has somehow wronged the rest of us characterizes the zeitgeist of the post-bailout era.
It is textbook law that a corporation’s board of directors must act in good faith to maximize for its shareholders the value of the firm under its charge. This essay considers the future of this bedrock principle of corporate law—shareholder wealth maximization—from practical and aspirational viewpoints. It first addresses the assertion that corporate law in fact does not require directors to maximize the wealth of their shareholder principals, and concludes that this claim is indefensible when viewed in proper context. It then asks to what extent shareholder wealth maximization ought to be the norm, and offers a libertarian, shareholder-driven take on corporate purpose.
Also see the response by Alexei Marcoux.