A. Shareholder Theory

Mon, 04 May 2026 20:50:44 +0000

# A. Shareholder Theory: Understanding Its Principles and Legacy in Business Strategy [SEO-Optimized Article]
Keywords: Shareholder Theory, business ethics, corporate governance, Milton Friedman, stakeholder theory, finance, corporate responsibility --- ### What Is Shareholder Theory?
Shareholder Theory is a foundational concept in corporate finance and business ethics that asserts a company’s primary responsibility is to maximize value for its shareholders. Rooted in classical economics and famously championed by economists like Milton Friedman, this theory emphasizes that corporate leaders should prioritize profitable growth and returns for owners, operating under the premise that long-term shareholder returns foster economic efficiency and innovation.