Question

In the light of the global pandemic the firms cannot maximize common
shareholder profits unless they take care of the planet and the people.
Comment

Answer 1

Is this a mid-semester question of an institute?

Answer 2

Firms must take care of both planet and people to ensure best of growth.

• Companies had to make tough decisions since the start of Covid-19. Ordinarily, selecting an amount based on shareholder expectations and earnings for the year was simple following past practice.
• With Covid-19 decimating the economy and creating confusion about the depth of the crisis, the decision became a dynamic matter of assessing and juggling several factors.
• Today's ideal company is one that solely focuses on shareholder capital to the exclusion of personal commitments and even obligations to family and society.
• The company must give way to a more complex governance model that prioritizes the company's health and resilience.
• The pandemic has shown society relies on well-functioning businesses to meet its most vital needs for food, shelter, and connectivity and that businesses are not primarily focused on maximizing shareholder returns.