Access to capital is a make-or-break issue for new firms. Across World Bank Enterprise Surveys, SME managers repeatedly report that “access to finance is the most important” obstacle they face, a constraint that suppresses firm entry, growth and job creation.
In entrepreneurial research, Evans & Jovanovic (1989) show that liquidity constraints materially shape who becomes an entrepreneur and how much they invest, formalizing the common reality that promising ideas often stall without outside funding.
This is why equity investors—angels, venture funds, strategic corporates, or community shareholders—can be pivotal: by absorbing risk and supplying patient capital, they enable young firms to acquire equipment, talent and market access, translating investment into employment and productivity gains.
Global evidence echoes this: industries that need more external finance grow faster in financially developed economies (Rajan & Zingales, 1998).
Because outside investors provide scarce risk capital, many governance systems have historically prioritized their claims. The iconic Dodge v. Ford (1919) opinion is often cited for the view that corporate purpose is “primarily for the profit of the stockholders.” Milton Friedman later crystallized this ethos: “The social responsibility of business is to increase its profits.”
Yet contemporary standards recognize a broader remit. The G20/OECD Principles of Corporate Governance describe governance as “a set of relationships between… management, board, shareholders and stakeholders,” and note that where stakeholder interests are protected by law, they should have avenues for redress—an explicit nudge toward balancing investor primacy with long-term firm health and social obligations.
Economic theory also links capital to innovation, not just payout: as Schumpeter put it, “Credit creation [is] the monetary complement of innovation,” the mechanism that lets resources shift from old uses to new ones.
In short, equity capital does more than open the doors; it funds the discovery process that creates business growth and jobs—historically justifying strong shareholder protections even as modern governance increasingly asks managers to deliver durable value for investors and the wider set of stakeholders who make that value possible.
King Money
The privileging of shareholder interests in modern management and economics has often amplified what I describe as the reign of “King Money”—the tendency to let financial gain dominate life choices, national policies, and corporate governance. Scholars have long warned of this. In Capitalism and Freedom (1962), Milton Friedman argued that the only social responsibility of business is to increase profits for shareholders, but decades of practice have shown this to be self-limiting. Harvard Business School professors Joseph L. Bower and Lynn Paine note that such shareholder-first thinking undermines innovation and sustainability, calling it “flawed in its assumptions, confused as a matter of law, and damaging in practice.”
Meanwhile, the OECD’s Principles of Corporate Governance stress that governance should balance “the interests of shareholders, employees, creditors, and other stakeholders,” precisely because money-only models erode social trust and economic resilience.
At the national level, the World Bank observes that societies overly tied to financial flows become prone to dependency and inequality, as “financial instability exacerbates poverty and undermines development outcomes.” And that is true for many African countries.
These realities echo my point that money, once placed at the center, shapes careers, marriages, politics, and even wars—demonstrating its corrosive power when treated as the ultimate arbiter of value.
Ostensibly, today humanity has elevated money to a form of divinity (Mammon)—a phenomenon critiqued both religiously and ethically. Scripture itself cautions that “the love of money is the root of all kinds of evil” (1 Timothy 6:10), a warning echoed by modern ethicists. Economist John Kenneth Galbraith famously described financial markets as being guided not by divine order but by “the bewitching attraction of wealth,” which can distort both rational decision-making and moral priorities.
This misplaced worship filters directly into management theory, where the elevation of shareholder value often leads to what Amartya Sen terms “false development”—growth that is “unaccompanied by freedom, justice, or human flourishing.” As a result, the pursuit of money above all else produces a hollow form of progress: Rising stock markets and corporate valuations on the surface, but beneath them fractured families, unequal societies, exploited labor, and environmental degradation. The fault, is not with money itself but with humanity’s decision to enthrone it as a god, a decision that shapes corporate priorities and perpetuates what the UN Development Programme calls “growth without development.”
The collapse of Enron (2001) is perhaps the textbook case. Once celebrated as America’s most innovative company, Enron’s leadership engineered complex accounting frauds to artificially inflate stock prices and satisfy Wall Street expectations. As legal scholar William Bratton notes, Enron exemplified “the destructive consequences of a culture in which shareholder value reigns supreme,” prioritizing short-term profits over ethics and sustainability. Shareholders initially benefited from the inflated numbers, but in the end tens of thousands of employees lost jobs and pensions, while investors lost billions. Here, the obsession with money as a metric of success created not development, but devastation.
The 2008 global financial crisis provides an even larger-scale example. Driven by banks’ and investment firms’ pursuit of higher shareholder returns, complex mortgage-backed securities and risky lending practices proliferated. The U.S. Financial Crisis Inquiry Commission concluded bluntly: “the crisis was the result of human action and inaction, not of Mother Nature or computer models.”
Shareholder primacy incentivized executives to chase profits through predatory lending and speculative trading, while broader stakeholders—homeowners, workers, and taxpayers—absorbed the costs. Nobel Laureate Joseph Stiglitz has emphasized that the crisis showed how “when the financial sector fails, it imposes costs on all of society, not just on the shareholders of banks.”
Similarly, extractive industries highlight how “King Money” can yield false development. Multinationals in oil, gas, and mining often report record shareholder profits while local communities like Obuasi, Ghana face pollution, land dispossession, and weak reinvestment.
The UN Conference on Trade and Development (UNCTAD) warns that this model creates “growth enclaves”—wealth concentrated among elites and investors, while surrounding communities see little improvement in livelihoods.
A striking example is the Niger Delta in Nigeria, where decades of oil wealth have enriched shareholders of international corporations but left local residents with environmental degradation, unemployment, and poverty. As scholar Michael Watts puts it, oil there has been “a curse rather than a blessing.”
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The author is a dynamic entrepreneur and the Founder and Group CEO of Groupe Soleil Vision, made up of Soleil Consults (US), LLC, NubianBiz.com and Soleil Publications. He has an extensive background In Strategy, Management, Entrepreneurship, Premium Audit Advisory, And Web Consulting. With professional experiences spanning both Ghana and the United States, Jules has developed a reputation as a thought leader in fields such as corporate governance, leadership, e-commerce, and customer service. His publications explore a variety of topics, including economics, information technology, marketing and branding, making him a prominent voice in discussions on development and business innovation across Africa. Through NubianBiz.com, he actively champions intra-African trade and technology-driven growth to empower SMEs across the continent?.
The post The Business Strategy Analyst with Jules Nartey-Tokoli: From King Money to crumbling societies: The hidden toll of shareholder-first capitalism (I) appeared first on The Business & Financial Times.
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