A corporate executive faces various challenges from competitors, economy, and financial markets. His responsibilities are multi-faceted that must look after the interests of customers, suppliers, employees, shareholders and other stakeholders in society. As such, managing a corporation is a very complex endeavor. Therefore, what are the “ideals” that a top executive should strive for in corporate management?
Eiichi Shibusawa’s “ideal” was a sense of duty that executive should hold dear to his heart. “If a corporate executive was chosen by the shareholders to manage a corporation,” Eiichi says, “then the executive must understand that his chair as well as the assets of the corporation was entrusted to him by many shareholders.” For Eiichi, it was clear that the executive must conduct himself as fiduciary to serve the interests of the shareholder.
“Therefore the corporate executive must manage the company’s assets more carefully even than his own personal assets,” says Eiichi. Imagine his dismay if Eiichi were to learn that about a century later, many top Wall Street executives earned several hundred million dollars worth of compensation, even while the firms that they managed either went bankrupt or had to be acquired at depressed share prices by other institutions.