Paul Polman, chief executive of Unilever, has added his voice to the growing number of business leaders who argue that “shareholder value” is a misguided and potentially harmful goal for companies to pursue.
In an interview with the Financial Times, Mr Polman said: “I do not work for the shareholder, to be honest; I work for the consumer, the customer . . . I’m not driven and I don’t drive this business model by driving shareholder value.”
Mr Polman’s comments echo the views of Jack Welch, the former chief executive of General Electric and the father of the shareholder value movement, who told the FT last year that “on the face of it, shareholder value is the dumbest idea in the world.”
The drive to improve returns to shareholders at the expense of other stakeholders has also been criticised by other leading business figures in the wake of the global economic crisis for being too focused on the short term.
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