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All Else Equal: Making Better Decisions

Rerun: Ep15 "Shareholder vs. Stakeholder Capitalism" with Alex Edmans

Jan 3, 2024
Delve into the debate of prioritizing shareholder value vs. broader stakeholder interests. Explore government intervention, societal impact, and CEO compensation. Learn how corporations can leverage their strengths for the greater good.
25:44

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Shareholder capitalism prioritizes long-term profits for shareholders, focusing on future profitability and firm value.
  • Stakeholder capitalism addresses externalities like environmental impact, advocating for balancing shareholder profits with wider societal concerns.

Deep dives

Shareholder Capitalism Focuses on Long-Term Value Creation

Shareholder capitalism emphasizes maximizing firm value for shareholders, aiming for long-term profits. Contrary to the belief that it prioritizes short-term gains, examples like venture capital investments in startups highlight a focus on future profitability. This approach aligns with long-term value creation by ensuring stock prices reflect future profitability.

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