Shareholdercentric
Shareholdercentric is a business philosophy that prioritizes the interests of shareholders above all other stakeholders. This approach holds that the primary goal of a company is to maximize shareholder value, typically measured by increasing stock prices and dividend payouts. Proponents of shareholdercentrism argue that by focusing on shareholder returns, companies are incentivized to operate efficiently, innovate, and make profitable decisions, which ultimately benefits the broader economy. This perspective gained significant traction in the late 20th century, influencing corporate governance and executive compensation practices.
Under a shareholdercentric model, management's main responsibility is to act as agents for the shareholders, making