Shares

Contrary to a widespread belief, shareholders do not own their companies in a strict sense, and it is not the sole or overriding duty of managers to maximise owner value in the long term, though sustained profitability is, for almost all companies, a prime purpose, and the case for their having other responsibilities has to be argued. Tradeable shares are not the only possible way of having a stake in a company, and some alternative might be better, but there are strong pressures for being able to trade shares, since they are financial assets, and if they can be traded some people will trade in them solely in the hopes of making short-term gains. The ownership of shares nevertheless confers responsibilities as well as rights, and the short-termism of the large institutional investors is a serious defect of current financial practice. Shareholders share a general responsibility for what their company does, and the problems of ethical investment are real, but, as in all business transactions, limited by reason of the impersonality of the market place, itself stemming from a recognition of its often being for the other party to make decisions.