Covid-19 Puts Others at the Table With Shareholders
The argument that companies need not consider wider communities is no longer plausible.
He’s asking some small-business loan recipients to give the money back.
Photographer: Al Drago/BloombergEven before the pandemic, the view was gaining momentum that company executives should care about people beyond their shareholders. The Business Roundtable statement last August was the beginning of the end for “Econ 101” thinking that only shareholders matter — an idea that had, during the 1970s and ’80s, jumped quickly from the classroom to Milton Friedman’s popular books to actual practice.
The Covid-19 pandemic will be Econ 101’s death knell, at least for the next several years and perhaps beyond. Going forward, corporate decision-makers will need to weigh effects of corporate activity on workers, communities and others.