The book places special emphasis on the relationship between corporations, managers, and shareholders. Drawing on Lynn Stout’s influential work on corporate governance, the authors challenge the common belief that corporate law requires managers to maximize shareholder value at all times. In reality, corporate directors and managers are expected to exercise business judgment that balances long-term corporate health, stakeholder relationships, and legal responsibilities.
Shareholders play a critical role in corporate governance, but the authors emphasize that corporations are not simply machines for immediate shareholder profit. Instead, corporations are long-lived institutions that rely on cooperation among shareholders, employees, customers, communities, and regulators. Ethical management therefore requires maintaining trust across this broader network.
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