Is shareholder wealth maximization a good norm to follow?

“Maximising shareholder value unfortunately continues to remain the 'Holy Grail' of running businesses.The self styled financial pundits of yore in all their wisdom thought this was the best way to minimise agency risks and costs.To me while it made financial sense,it made little socio-economic sense.Enron,Worldcom,Northern Rock,the subprime messes were all creation of indulgent managements who purportedly acted in financially appropriate manner but ended up being socially irresponsible(Who cares.They were not expected to be altruistic!),for sake of pleasing thier shareholders.

That's the downside of a laissez faire market economy but with each of such fiascos,the innocent small time investor or the mortgage owner down the street lost his lifetime earnings. We need a complete rejig of the concept itself followed by norms for social governance in running businesses.”

Reservations/Quotas

To all those who are crying hoarse against reservation ,let them not forget that the IITs and the IIMs were conceived as part of Central Government initiatives. They were painstakingly and assiduously nurtured by funds from the Central Government (and of course also aid from various foreign governments in the initial years),massively subsidizing student education while aiming to provide quality education in technology and management. Government of India has every right to tweak the admission policies of these institutions to suit the larger social objectives of the nation. Moreover, why bother about the institutions like IITs and IIMs if their only purpose is to train their incumbents for grand placement or US visa melas? Why deprive the slightly less endowed(gutter snipes if the pseudo elitists like to call them) to partake in the melas? Is there a single piece of trailblazing research work undertaken at any of these institutes which is comparable to the Ivy league institutes of the West? Can we dub them truly premier?

Ask any of the bright alumni if they are interested in making a career in these institutes for research and you can almost pre-empt the answer. I am sure the alumni of Stanford or MIT would be proud to join their institutions for the research opportunities they provide.That speaks volumes. I think the whole debate is irrelevant. The protagonists of anti reservation instead of protesting could do better by working towards setting up a number of quality educational and research institutions in private domain, to meet the needs of truly deserving students.

Corporate Social Responsibility(CSR)

Corporate social responsibility defined in terms of philanthropy, charity, espousal of social causes, labour relations, going green, etc, is to trivialise its very purpose as it allows errant firms to go off the hook by robbing one section of the poor and donating a part of the loot to another section of the poor.
Looking good to society is different from being good. CSR is more fundamental in nature and should dwell on the ways in which firms must ideally operate in a business environment by not indulging in practices like cartelisation, stock price manipulation, unfair trade practices and balance sheet manipulation. The idea is to prevent firms from enriching themselves at the cost of other sections of the society. The buck of social responsibility must start with democratically elected politicians who must not succumb to policy directives of influential firms.

Romantic careers

Monetary consideration has been and will be the sole motivator for most people in selecting careers with increasing all round and inclusive economic growth.Increasingly,business and shareholder activism are bound to demand absolute subservience of the employees to the goals of the employers,do their biding,or to put euphemistically 'share their vision',to prevent conflicts of interests.In such a set up,I would see decreasing bandwidth of freedom for employees to pursue their personal interests or to do what they love to.

Employees may claim unremitted love for their chosen careers as long as such careers are well paying.Romanticism borders on adventurism and very few would dare to forsake economics for sake of their first love.

Free will and Karma

Man makes choices every day,every minute and every second be it in his profession,home or other matters.The decision tree that emerges from the choices determines his status.There could be several factors that influence each of his choices like his desires,ambitions,goals, a priori understanding of the world around him and last but not least his lineage.If one believes that every man is born with a unique set of desires,a lineage and a capacity to grasp things around him,is there not a certain sense of inevitability and predestination in his decision making?

I believe predestiny or Karma is a 'fait accompli' of the given set of conditions a man is born into that affects his decision making rather than predestined future outcomes of which he is incapable of knowing.