confused. We are in business solely to improve the inherent value of the common stockholders' equity in the company. Economist Milton Friedman introduced the Friedman doctrine in a 1970 essay for The New York Times, entitled "A Friedman Doctrine: The Social Responsibility of Business Is to Increase Its Profits". In it, he argued that a company has no social responsibility to the public or society; its only responsibility is to its shareholders. The Friedman doctrine was amplified after the publication of an influential 1976 business paper by finance professors Michael C. Jensen and William Meckling, "Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure", which provided a quantitative economic rationale for maximizing shareholder value. On August 12, 1981, Jack Welch made a speech at The Pierre Hotel in New York City called "Growing Fast in a Slow-Growth Economy". This is often acknowledged as the "dawn" of the obsession with shareholder value. Welch's stated aim was to be the biggest or second biggest market player, and to return maximum value to stockholders. In 1983, Brian Pitman became CEO of Lloyds Bank and sought to clarify the governing objective for the company. The following year, he set return on equity as the key measure of financial performance and set a target for every business within the bank to achieve a return that exceeded its cost of equity. The management consulting firms Stern Stewart, Marakon Associates, and Alcar pioneered value-based management (VBM), or "managing for value", in the 1980s based on the academic work of Joel Stern, Dr. Bill Alberts, and Professor Alfred Rappaport. In "Creating Shareholder Value: The New Standard for Business Performance", published in 1986, Rappaport argued that "the ultimate test of corporate strategy, indeed the only reliable measure, is whether it creates economic value for shareholders". Other consulting firms including McKinsey and BCG developed VBM approaches. Value-based management became prominent during the late 1980s and 1990s. In March 2009, Welch criticized parts of the application of this concept, calling a focus on shareholder quarterly profit and share price gains "the dumbest idea in the world". Welch then elaborated on this, claiming that the quotes were taken out of context. Interpretation During the 1970s, there was an economic crisis caused by stagflation. The stock market had been flat for nearly 12 years and inflation levels had reached double-digits. The Japanese had taken the top spot as the dominant force