Beyond Shareholder Primacy: Remaking Capitalism for a Sustainable Future

From the author of Capitalism at the Crossroads, a call to consciousness--and action--for individuals, organizations, communities, and nations.

Our current Milton Friedman-style ＂shareholder primacy capitalism,＂ as taught in business schools and embraced around the world, has become dangerous for society, the climate, and the planet. Moreover, Stuart L. Hart argues, it’s economically unnecessary. But there are surprising reasons for hope--from the history of capitalism itself. Beyond Shareholder Primacy argues that capitalism has reformed itself twice before and is poised for a third major reformation. Retelling the origin story of capitalism from the fifteenth century to the present, Hart argues that a radically sustainable, just capitalism is possible, and even likely, in our lifetime.

Hart goes on to describe what it will take to move beyond capitalism’s present worship of ＂shareholder primacy,＂ including corporate transformations to re-embed purpose and reforms to major economic institutions. A key requirement is eliminating the ＂externalities＂ (or collateral damage) of our current shareholder capitalism. Sustainable capitalism will explicitly incorporate the needs of society and the planet, include a financial system that allows leaders to prioritize the planet, reorganize business schools around sustainable management thinking, and enable corporations not just to stop ignoring the damage they cause, but actually begin to create positive impact.

Stuart L. Hart is the Samuel C. Johnson Chair in Sustainable Global Enterprise and Professor of Management at Cornell University’s Johnson School of Management, where he founded the Center for Sustainable Global Enterprise. He previously was co-founder and former Director of The Sustainable Innovation MBA at the University of Vermont’s Grossman School of Business. He is also founder and President of Enterprise for a Sustainable World, and founder of the Base of the Pyramid Global Network. He is one of the world’s top authorities on the implications of environment and poverty for business strategy. He is author of the influential book, Capitalism at the Crossroads, 3rd Edition: Next Generation Business Strategies for a Post-Crisis World.