Value creation or Valuation?

What is the role of a CEO of an organisation? Is it Value creation or Valuation?

For long, we had known that the purpose of a business was to help the society and to protect the interest of all stakeholders. Today, there are many who think that the purpose of business is to make huge profits and it goes with the saying – the business of a business is to do business and make profit.

The Stock market expects phenomenal performance, the Regulator is interested in protecting the share holders’ interests and the CEO is interested in increasing the valuation of the business. But everyone is not working in unison towards the larger picture – protecting the society and adding value to human efforts and their living conditions. A case in example is of how some big Pharma companies let go a golden opportunity to help the people and took advantage of the Covid pandemic to rake in billions of dollars while scores of other businesses were down and almost vanished from the market. On the contrary, a mid sized $600 M software technology company shifted its development office to a remote town in down south India and its CEO relocated there from his US office and hired local talents.

The corporates have been compelled by the market regulators and the Government to declare CSR initiatives and fund them to get tax exemption, otherwise imagine what could have been the situation. Let us hope more businesses give back to society that bought their products or services and unless their CEO’s convince themselves and their boards to set this direction, it will be profits being the only motive all the way.