The foundation of American economic prosperity is being undermined by increasingly dominant firms and outdated corporate-governance practices. Fortunately, there are simple steps that regulators can take immediately to put the economy – and American society – on a sounder footing.
NEW YORK – As public discontent forces a political reckoning in most developed economies, the social contract binding together markets, states, and citizens is being reimagined. Indeed, today’s anger and alienation present an opportunity to address cracks in our societies’ economic foundations, starting in the United States.
Commercial activity is being rapidly digitized at scale, suggesting that the largest and most successful companies in the technology sector – from Amazon to Zoom – will continue to be dominant market forces for the foreseeable future. Yet while investors in these fast-growing enterprises have enjoyed significant financial gains, most others have not. The leading tech companies have fallen short not only in creating value for many of their stakeholders but also in contributing to US economic growth overall.
Indeed, now that everyone has adapted to the effects of the COVID-19 pandemic, many business leaders have shifted their focus back to quarterly profits and share prices. Just this month, Microsoft, the world’s second-most valuable publicly traded company, announced a $60 billion share buyback plan and dividend increase. Meanwhile, there has been very little talk of what management teams could do to create long-term value for shareholders and stakeholders alike.