Softening Capitalism’s Downsides
THIS IS A challenging time to be an executive. For decades the CEO’s primary responsibility has been to reward shareholders, even short-term ones. But as Joseph Bower and Lynn Paine pointed out in a 2017 HBR article, “The Error at the Heart of Corporate Leadership,” that approach wasn’t grounded in law or common sense. It was fashion. Today’s leaders tend to talk instead about serving a broad range of stakeholders, not just shareholders. Another fad? Perhaps. But it’s an idea that has the potential to reorder capitalism and perhaps soften some of its downsides: obsessive short-term thinking, perverse income inequality, the destruction of the planet. I recently had a chance to interview Ursula Burns, the former Xerox CEO, about this shift. Burns made history in 2009 when she became the first Black…