The logical reason why shareholder value is paramount is due to the structure of the financial statements, in which shareholder value directly increases corporate net-worth (or more accurately, net assets) while Labor detracts from net worth, since labor is an expense (as opposed to capital investment). Furthermore, the customers are not paramount because pleasing customers is an expensive gamble, as so many failed marketing campaigns attest. Perhaps the FASB, the accounting standard-setting body in the US, should consider requiring companies to treat employee welfare & training as assets, which would positively reflect their balance sheets.
