Question A:
Having companies run to maximize shareholder value creates significant negative externalities for workers and communities.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
5%
0%
16%
28%
26%
16%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
16%
27%
28%
28%
Question B:
Appropriately managed corporations could create significantly greater value than they currently do for a range of stakeholders – including workers, suppliers, customers and community members – with negligible impacts on shareholder value.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
5%
7%
21%
23%
33%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
13%
22%
22%
39%
5%
Question C:
Effective mechanisms for boards of directors to ensure that CEOs act in ways that balance the interests of all stakeholders would be straightforward to introduce.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
2%
14%
42%
21%
12%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
20%
49%
21%
9%
0%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Cutting wages or polluting increase shareholder value with considerable social cost. Competition will not necessarily drive them out
|
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 Alberto Alesina |
Harvard | Bio/Vote History | ||
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it depends on too many factors to give a general answer
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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Negative effects, quite possibly. But not sure why these would be externalities as commonly defined.
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 David Autor |
MIT | Bio/Vote History | ||
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Data show huge monetary + psychic costs to workers of mass layoffs that are almost surely not internalized by employers
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 Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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Companies are transacting w workers so externality wrong word. Community externalities can be pos or neg in diff cases.
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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This is the point of regulation. For examples, pollution and labor regulations are intended to mitigate such effects.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Greenhouse gases are but one example.
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Too vague to answer with certainty.
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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Not clear how one should interpret "significant"
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 Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Externalities seem small between workers and firms so poor ?
Externalities for communities could be + (eg agglomeration) or - (eg pollution)
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 Robert Hall |
Stanford | Bio/Vote History | ||
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This depends on the effectiveness of laws and regulations limiting harmful conduct by corporations.
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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It depends. Worker and community externalities can arise if companies have monopoly/monopsony power but not under competition.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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Probably significant externalities, but not sure there are significantly better alternative governance structures
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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It depends on the degree to which shareholder values are aligned with worker/community values. This differs among firms & industries.
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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This depends on the regulatory environment. IF laws impose the proper constraints THEN maximizing value will not create externalities.
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||||
 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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sometimes, but doubtful that this is pervasive
|
||||
 Pete Klenow |
Stanford | Bio/Vote History | ||
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Pollution externalities, for one.
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||||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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Would prefer "sometimes" to "uncertain" here.
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||||
 Eric Maskin |
Harvard | Bio/Vote History | ||
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But shareholders themselves may have other objectives besides the share price.
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||||
 William Nordhaus |
Yale | Bio/Vote History | ||
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||||
 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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Companies can clearly create externalities, but a general characterization of their sign and magnitude is less clear.
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||||
 José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Long-run value maximization requires avoiding the negative consequences of harming workers or communities.
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||||
 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Enforcing regulation can handle negative externalities. Companies should maximize value subject to these constraints
|
||||
 James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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||||
 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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I am assuming this means "can create". Should not be controversial. See Theranos. Mortgage lenders in early 2000s. Etc.
|
||||
 Christopher Udry |
Northwestern | Bio/Vote History | ||
|
Second best. Profit max in context of other externalities, imperfect markets, incomplete info generates bad outcomes.
|
||||
Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Daron Acemoglu |
MIT | Bio/Vote History | ||
|
Some of the steps will be costly for shareholders.
|
||||
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Alberto Alesina |
Harvard | Bio/Vote History | ||
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||||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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||||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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I don’t know why this would be a free lunch
|
||||
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Hard to know. But if true, this would imply almost no mis-alignment of incentives between shareholders and the others. That seems unlikely.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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empirical evidence is weak/nonexistent
theory would say to disagree though
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||||
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Robert Hall |
Stanford | Bio/Vote History | ||
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See previous
|
||||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Companies are not usually managed inefficiently. They may be maximizing the wrong thing but I don't think there's money "left on the table."
|
||||
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Bengt Holmström |
MIT | Bio/Vote History | ||
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No obvious win-win alternatives, but better for workers/stakeholders at the cost of shareholders, yes.
|
||||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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There is NO answer that is generally true. It depends on the firm & industry. But, I would not say that it is true on average.
|
||||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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||||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
|
In light of the current litigation regarding opioids, it is clear that things could be improved.
|
||||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Shareholder value maximization often coincides with the community, employees, suppliers. When they conflict, shareholders should decide.
|
||||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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I think these cases exist, especially over longer time periods; less clear they are generic and easy to identify.
|
||||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Appropriate actions could impose second-order losses on shareholders while attaining first-order gains for others.
|
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José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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There is no reason to think that firms are as inefficient as an affirmative answer would imply.
|
||||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Should adding solar panels need the same ROI as buying new computers? Employees, customers, and shareholders all live on the same planet.
|
||||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
|
"negligible" is the word that makes me unsure.
|
||||
Question C Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Daron Acemoglu |
MIT | Bio/Vote History | ||
|
Moving away from extreme shareholder values needs simultaneous changes in laws & norms. Imposing topdown regulations wouldn’t be sufficient
|
||||
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Alberto Alesina |
Harvard | Bio/Vote History | ||
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|
||||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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|
||||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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|
||||
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David Autor |
MIT | Bio/Vote History | ||
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Never straightforward. But still potentially worth it. Other country examples — Germany, Denmark— prove it’s feasible.
|
||||
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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||||
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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|
||||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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|
||||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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||||
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Raj Chetty |
Harvard | Bio/Vote History | ||
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|
||||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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|
||||
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David Cutler |
Harvard | Bio/Vote History | ||
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|
||||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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|
||||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
|
This doesn't seem "straightforward." It would be complicated to balance the potential conflicts of interests among all stakeholders.
|
||||
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
|
Few major changes are straightforward but that does not mean they are impossible.
|
||||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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|
||||
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Liran Einav |
Stanford | Bio/Vote History | ||
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|
||||
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Ray Fair |
Yale | Bio/Vote History | ||
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|
||||
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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|
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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|
||||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
|
v difficult to maximize multiple goals w/o objective function
questions missing the big picture by ignoring central role for govt policy
|
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Robert Hall |
Stanford | Bio/Vote History | ||
|
Corporate governance is a hard subject and no reform is easy.
|
||||
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Oliver Hart |
Harvard | Bio/Vote History | ||
|
I don't see why this would be good unless the company is set up for this purpose, in which case it would be difficult but possible.
|
||||
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Bengt Holmström |
MIT | Bio/Vote History | ||
|
Definitely not straightforward.
|
||||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
|
|
||||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Kenneth Judd |
Stanford | Bio/Vote History | ||
|
There is nothing "straightforward" about creating such mechanisms.
|
||||
|
Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
Milton Friedman was and is absolutely right on this one.
|
||||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
it is a hornet's nest
-see background information here |
||||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
|
Designing effective mechanisms to balance interests is incredibly important but rarely "straightforward"
|
||||
|
Eric Maskin |
Harvard | Bio/Vote History | ||
|
Different stakeholders could have representation on the Board, but making quantitative tradeoffs across interests is a challenge.
|
||||
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William Nordhaus |
Yale | Bio/Vote History | ||
|
|
||||
|
Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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|
||||
|
Emmanuel Saez |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Larry Samuelson |
Yale | Bio/Vote History | ||
|
Anticipating the unintended consequences of incentives is always difficult.
|
||||
|
José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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|
||||
|
Richard Schmalensee |
MIT | Bio/Vote History | ||
|
|
||||
|
Carl Shapiro |
Berkeley | Bio/Vote History | ||
|
|
||||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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|
||||
|
James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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|
||||
|
Richard Thaler |
Chicago Booth | Bio/Vote History | ||
|
There is always one word too many. Here it is straightforward. But here is one rule: don't do it if you would not want it on the front page.
|
||||
|
Christopher Udry |
Northwestern | Bio/Vote History | ||
|
I don't think that this is easy. But it is important to work to figure it out.
|
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