An old debate over the proper role of C.E.O.s has entered the political arena. But chief executives aren’t well equipped to take on broad social issues.
What is the job of a company’s chief executive officer and, more generally, its management team?
This classic question of economics seems bland on the surface, yet it has made an appearance in the 2020 presidential race. How political leaders answer it may determine the future of American corporations and of much social policy as well.
If you open any standard economics textbook, such as one of mine, you will be told that a firm’s objective is to maximize profit. That goal is sometimes described as maximizing shareholder value, which is roughly the same thing because the value of a firm’s shares depends on its current and future profitability. Continue reading.