An Era of Oligarchy

How a Misguided Corporate Governance Theory Helped Lead to This Moment

The past decade has seen unprecedented levels of wealthy elites thumbing the scales of government to advance their own interests.

“I really think that corporate and elite power is what got us here,” Roosevelt Senior Fellow Lenore Palladino points out in a Roosevelt Institute Book Club discussion of her new book Good Company: Economic Policy After Shareholder Primacy. “We may have a new class of corporate oligarchs in Elon Musk and his crew, but the underlying power of the economic elite and neoliberalism as our dominant economic ideology really is critical to understanding how we got here. And I believe it’s built in part on an edifice of shareholder primacy.” 

Shareholder primacy—the corporate governance principle that a corporation’s primary goal should be to maximize value for shareholders—casts those who own the most shares as the key decision-makers for corporations and the primary beneficiaries of all corporate profits, to the detriment of workers and all other stakeholders. “It’s a theory of allocation, not innovation and production,” Palladino says.

This model, she argues, has proliferated because of a persistent myth that shareholders are always investors. In actuality, the role of the modern shareholder is extractive, prioritizing short-term profit over long-term innovation and development, and should not be confused with the productive role of the investor. The buying and trading of shares on financial markets does not contribute anything to the company whose shares are being traded and has increasingly served to concentrate resources in the hands of a few elite players.

Listen to the full conversation, including Palladino’s policy proposals to subvert the shareholder primacy model, here: Roosevelt Institute Book Club Presents: Good Company: Economic Policy After Shareholder Primacy with Lenore Palladino

What We’re Talking About

What We’re Reading

• Cecile Richards, the longtime leader of Planned Parenthood who died Monday at age 67, taught us how to combine activism with institutional power to advance feminist priorities in the 21st century.
• The Fed and the Federal Deposit Insurance Corporation (FDIC) left the Network for Greening the Financial System (NGFS), an international group of central banks committed to combating climate change.
  • “Withdrawing Fed participation from the climate conversation among the world’s central bankers further undermines our country’s prospects for assessing and managing climate risk without having our ideological blinders on,” Roosevelt Senior Fellow Sarah Bloom Raskin said. “The symbolism of this move at the beginning of 2025 is ominous.”
  • The NGFS vows to continue its work regardless, acknowledging, in the words of Roosevelt Fellow Graham Steele, “the scientific and economic consensus that climate change poses material financial risks.”
• In New York Times Opinion, Jamelle Bouie cited Franklin D. Roosevelt’s first inaugural address to demonstrate how antidemocratic influencers misunderstand basic history.