In the book, Stout traces how the idea of why a company exists has changed over the years. Once upon a time, according to Stout, executives believed their companies existed to create good products and serve the community (in part by creating employment). The shift to shareholder primacy changed that, and put a company's stock price above everything else.
That's why Novogratz and others on the Street see this "shareholder's first" way of looking at labor and wages as a major problem — one that distorts incentives and leads to short-term thinking.Read more in Business Insider.
