"It is time to look at what a company really exists for. The debate started when many CEOs said that putting people and the planet first should replace the old rule of only caring about shareholders. This idea, called stakeholder capitalism, got a lot of attention from media and politicians who pushed for more ESG rules. Firms that manage money quickly opened green funds, while advisory groups began rating boards on climate and social topics instead of profits. Big companies rushed to show they were doing the right thing.

But this rush went too fast and created problems. First, climate change is serious but not an immediate threat that justifies spending trillions on untested projects or blanket reporting rules that benefit only regulators and auditors. Second, the money poured into ESG funds did not give good returns and many startups closed or changed focus. Third, most companies already reported on ESG issues like sustainability and equality; they were fine with that unless the goals became unrealistic.

The response has been a return of power to individual owners. Regulators and big investors are questioning how voting rights are exercised by anonymous institutions that may not share the same interests as real shareholders. Companies are now making it easier for people to vote directly and give standing instructions. This shift is not a political fad but a realignment of corporate governance to match who truly owns the business.

People now rely on 401(k)s and other retirement accounts for their future. While they want companies to act responsibly, those responsibilities should support long‑term profitability, not become ends in themselves. A recent court case showed that letting ESG goals drive pension plans could breach fiduciary duties.

The lesson is clear: ESG matters as a tool to help companies thrive, not as an end goal. Boards must use their expertise to balance all interests and keep the company’s purpose focused on sustainable shareholder value. This change is a practical step toward more effective corporate governance. "

Rethinking Corporate Purpose: A Shift Back to Shareholder Focus

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