By Paul Strebel
Large firms have been treating their shareholders as their most critical stakeholders. In the short run this might make sense, but not in the long term. The author argues that in order to safeguard and increase the industry’s long-term performance and cash flows, it is critical that big business starts to identify their critical stakeholders and adapt their mission.
President Trump has been pushing big business to give stakeholders other than their shareholders a better deal. For example, Big Pharma firms, such as Pfizer, Novartis and Merck have been persuaded to suspend price increases. Beyond giving his base something to cheer for, Trump’s attacks have highlighted a fundamental economic flaw in the business models of big business.
About the Author
Paul Strebel is Professor Emeritus of Governance and Strategy at IMD, with three decades of experience as a director and advisor to boards and top management teams of both listed and family-held companies on strategy and governance.