DISCUSSION Putting Shareholders First Does Not Serve Shareholders, Society or Economy

by Laurie Fitzjohn-Sykes

There is rising disenchantment with the status quo. People sense that the economy serves the few not the many. Alongside this the UK government is struggling to grow the economy while cutting the deficit. This is being caused by a short-term business approach that is not working for shareholders or society, and therefore the answer will not come from politicians, but businesses adopting a different approach.

Companies in the UK, despite considerable success in many areas, suffer from under-investment, low productivity, low real wage growth, low employee engagement and low public support. The irony is that the returns to shareholders have also been poor. The 20-year real return on UK equities is now the same as government bonds, not seen since the 1920s and 30s.

The current approach is not only failing our companies, but is also distorting our economy…

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