Finance and business ethics in an era of stakeholder capitalism

Abstract

In 2019, the Business Roundtable changed its long-standing commitment to shareholder wealth maximization in favor of stakeholder capitalism. Business schools tend to teach the shareholder view in finance courses and the stakeholder view in business ethics courses. Given the increasing popularity of stakeholder capitalism, is it time for business educators—whether teaching finance or business ethics—to abandon the shareholder approach in favor of stakeholder capitalism? The author examines the shareholder wealth maximization and stakeholder capitalism approaches and trends in socially responsible investing. The article concludes with a proposed harmonization of the shareholder and stakeholder views.