Al Dunlap At SunbeamDoes maximizing shareholder value reward socially destructive actions by corporations? Of course not. A corporation is not an instrument of shareholders, but a coalition between various resource providers , with the intention of increasing their common wealth and therefore is contradictory to Al Dunlap's vision of shareholder primacy. During his tenure at Sunbeam, Al Dunlap propped up profit by laying off many employees and closing many factories. If we look at the short-term thing, this approach looks very attractive as it brings quick short-term gains. In the long term, however, such a decision would not ensure the company's sustainability. Profitability and responsibility can and should be combined in an ideal world, however it is clear that they are at least partially contradictory. Shareholder pressure should not force a company to make short-term decisions that could be detrimental to the company's long-term profitability. On the one hand, businesses must be profitable to survive, and companies must earn a higher return on equity capital than they otherwise would. be achieved if the money was deposited in a risk-free bank account. The profits made create investor confidence and are usually reflected in higher stock prices, which makes it easier to grow the company further towards its goals. Profits are not just an outcome, but also a source of competitive health and corporate wealth. On the other hand, companies are networks of individuals and people who work together for a common goal and not simple 'economic machines'....... middle of paper ......social situation of the company in the board of directors . Therefore, the board of directors made the right decision by dismissing Albert Dunlap as CEO of Sunbeam. This is actually an example of mixed corporate governance. There are independent board members to ensure that the operational and financial health of the company can be accurately assessed from time to time. Peter Langerman conducted a thorough investigation into financial matters only because Dunlap offered to resign in response to a trivial question. The board should have watched the financial health of the company from the beginning. But after realizing the gravity of the situation, the board was prompt and unanimous in firing Albert Dunlap, which shows good corporate governance.