Purpose of a Corporation

This article on Quartz at Work talks about recent business round table where CEO agreed that companies have a responsibility to society and not just to shareholders.

I have always felt that if you want to be in business for the long term, you have to look forward to more than just making money. The problem with stock companies is that it is not an owner running the business, but a manager. This has always been a problem for stock companies. Managers of business have always only looked to the short term.

Most business owners who want to be in business for the long term have realized that they must do right by their customers, employees, and communities and then money will be made for the long term. As shareholders in companies, we also have to buy into companies that behave well if we want to be long term investors.

Yes, some stock traders can make capital gains trading stock on the stock market, but most cannot. I think if you want to make money in the market you have to be a long term investor in good companies. So, I think this is a good thing that CEO’s at Business Roundtable have now recognized that their responsibility is not just making money for the stockholders, but that they have broader responsibilities. This attitude can only benefit stock companies in the long run and will also be great for shareholders in the long run.

On my other blog I wrote yesterday about Alimentation Couche-Tard Inc (TSX-ATD.B, OTC-ANCUF) ... learn more. Next, I will write about Exchange Income Corp (TSX-EIF, OTC-EIFZF) ... learn more on Friday August 30, 2019 around 5 pm.

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