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- American economist Milton Friedman developed the doctrine as a theory of business ethics that states that “an entity’s greatest responsibility lies in the satisfaction of the shareholders.” Therefore, the business should always endeavor to maximize its revenues to increase returns for the shareholders.
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The Friedman Doctrine holds that decisions concerning social responsibility rest on the shoulders of the shareholders, not the executives of the company. He argues that an entity is not obligated to any social responsibilities unless the shareholders decide to such an effect.
The Friedman doctrine, also called shareholder theory, is a normative theory of business ethics advanced by economist Milton Friedman which holds that the social responsibility of business is to increase its profits. [1]
Jun 26, 2013 · No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the...
- Steve Denning
Apr 21, 2021 · His primary concern was the dissipation of shareholder value through the conglomerate movement, and the associated loss of corporate focus and accountability. And his warning appears to have been vindicated later in the ’70s, when the Dow Jones average had lost as much as half its value.
- Clifford Asness
Sep 17, 2020 · The requirement of regular shareholder engagement acknowledges accountability to investors, but also the shared responsibility of shareholders for responsible long-term corporate stewardship. Essentially, this is The New Paradigm for corporate governance issued in 2016 by the World Economic Forum.
Jun 21, 2022 · What is stakeholder and shareholder primacy and how do these perspectives affect economic thinking? Read the explainer article here. Milton Friedman published his famous article about...
Mar 13, 2024 · The Friedman Doctrine, also known as Shareholder Theory, asserts that a corporation's primary responsibility is to maximize shareholder value through profit generation, emphasizing economic efficiency as the sole objective.
