A VC in Vacationland

Image via Wikipedia

My only question is why it took so long to debunk the ideas that companies should focus on maximizing shareholder value? In a recent Financial Times interview, Paul Polman, CEO of Unilever, made sure that the markets and his employees know that Unilever's first priority was the satisfaction of their customers, not shareholders.

He joins other former shareholder focused advocates, including Jack Welsh–often cited as the father of shareholder value–in distancing themselves from a short term, quarterly view of maximizing share price and tying compensation to achieving the highest possible share prices.

Mr Polman understands that if you make your customers your primary focus and happy over the long term, then your shareholders will be amply rewarded.  Nuf said…..

Does this fly in the face of Milton's Friedman's famous dictum that it is the social responsibility of companies to increase their profits?  Absolutely not, just do not do it all in the short term. 

http://static.zemanta.com/readside/loader.js