Corporate law challenged: Shareholders' power over stakeholders questioned.
The article discusses the debate in corporate law about whether companies should prioritize shareholders or not. It introduces two models of shareholder primacy: radical and traditional. The radical model argues that management's main goal is to maximize shareholder wealth, but this isn't a legal requirement. The traditional model sees shareholders as having a special role in corporate governance, but without a mandate for wealth maximization. The law supports the traditional model, acknowledging shareholders' importance without requiring profit maximization.