The Shareholder Primacy Program

About Kent

Kent arrived in Hawaii at the age of 14 and graduated from Stevenson Intermediate and Roosevelt High School. During his 40-year career he was an attorney with Cades Schutte, Director of Planning and Economic Development for the State of Hawaii, Project Manager for the Mililani Technology Park, Senior Vice President for the YMCA of Honolulu, President of Chaminade University, and President of Pacific Rim Christian University. He also served as CEO of the Greenleaf Center for Servant Leadership in Indiana, and CEO of the Greenleaf Centre for Servant Leadership (Asia) in Singapore. He is the author of ten books on topics including the Paradoxical Commandments, servant leadership, and business ethics. Now retired from full-time work, Kent and his wife, Dr Elizabeth Keith, enjoy teaching and speaking, writing, and traveling. They have three grown children. Last month, they became grandparents for the first time. Kent first joined Rotary in 1991 and has been a member of the Rotary Club of Honolulu, the Rotary Club of Carmel, Indiana, and our own club. Kent’s topic today is “Resolving the Shareholder Primacy Problem.”

Resolving the Shareholder Primacy Problem

“Shareholder primacy” is the idea that shareholders own the business, so corporations must, as a matter of law, give the highest priority to maximizing shareholder wealth. Recent research indicates that the best way to maximize shareholder wealth is to take care of all stakeholders. Shareholder primacy is a myth, because it is based on a false assumption and a misreading of American law. While corporations are free to put shareholders first, they have no fiduciary duty or legal obligation to do so.