"Maximize the economic returns to the share-holder" This has been mantra of corporations all across the world. This follows from the argument by Scottish economist Adam Smith that an "invisible hand" guides companies to strive for maximum profits, which in turn benefits society too. While pursuing this aim, should corporations or do they really care about social good / benefit. To paraphrase this, former Citigroup CEO makes an interesting statement " We want to grow aggressively, but without breaking law". On the other hand GE CEO Immelt states "Its upto GE to be a good citizen. Not only is it a nice thing to do, it's good for business".
Most of the Corporations are assumed to live for perpetuity. So company shareholders and executives should concentrate on long term value creation, rather than trying to make quick bucks or running their own agendas. But for most of executives and shareholders, five years or a decade at most could be long term. This could result in decisions which in fact are myopic when you consider from the perspective of corporation. This is the reason you see instances like Nortel, Sun Microsystems.
When we talk about value creation, it's better we limit our scope to economic returns. Because it's very hard to define terms like social good. At most we can talk about perceived social good in one particular regime and legal framework. For example some thing that's considered legal in china could be illegal in united states. For example as a shareholder of Google, should you oblige to regulations of china ? or should Research in Motion oblige to security concerns of Indian government ? When we limit our aim to economic returns and turn pragmatic then answers to these questions are more clear.
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