Proponents of the Chicago School would argue yes, because the shareholder is the FOCUS of the model, whereas proponents of the STAKEHOLDER model would argue no, because the shareholder is only one of many stakeholders to whom the corporation is accountable. Equating corporate governance with MAXIMIZING shareholder value reduces the focus of corporate governance to creating “external” benefits for shareholders alone. This is not the sole purpose of corporate governance.

The reduction of corporate governance to maximizing shareholder value is not only wrong in principle; in practice it has led to DRAMATIC failures, such as the recent and ONGOING global financial crisis.

Proponents of the Chicago School would argue yes, because the shareholder is the focus of the model, whereas proponents of the stakeholder model would argue no, because the shareholder is only one of many stakeholders to whom the corporation is accountable. Equating corporate governance with maximizing shareholder value reduces the focus of corporate governance to creating “external” benefits for shareholders alone. This is not the sole purpose of corporate governance.

The reduction of corporate governance to maximizing shareholder value is not only wrong in principle; in practice it has led to dramatic failures, such as the recent and ongoing global financial crisis.