The goals are not mutually exclusive, but one arises from the other; it's a matter of priorities. Any company, whether publicly or privately held, is formed to provide a product or service to customers. If that company establishes the long-term value of those products or services to its customers as its first priority, then its repeat business and customer base will grow, enhancing value for its owners.

If, on the other hand, a company sets shareholder value as its top priority, the temptation will exist to aggressively cut costs and/or raise prices in order to provide maximum return to its owners. But when cost-cutting leads to lower product or service quality and price increases lead to a perceived disjunction between product or service price and value, the customer base, hence shareholder value, will decrease. How many of us have been sidappointed in a product or service and vowed never to patronize that company again? That can't be good for the owners.

I am not troubled by this statement. As long this aim is disclosed to shareholders and reflects, on an ongoing basis, the company's strategy, investors can make an informed decision as to whether to invest their money in a company that holds this view.

A corporation is an immortal capital acquisiton vehicle designed to capture and grow capital and insulate it from estate taxes and dissolution through death. It has all the attributes of a living person and few of the drawbacks. It survives and grows through its management and production/service activities, but it's main purpose is the acquisition of capital, or growth, just like any other living creature. What it does, who does it, and how it's done are factors in achieving that purpose.

While I agree in principle that the purpose of a corporation is to maximize long-term shareholder value, the real question here is how to define 'long term.' Is it 10 years? 50 years? Perpetuity? If your shareholders are all 95, isn't their long term only the next two or three years? In the long term, aren't we all dead?