To understand the contribution of shareholder primacy to the financial crisis of 2008, it has to be defined first. Berle describes shareholder primacy as “the view that the corporation exists only to make money for its shareholders.” (qtd. in Stout 1189). The premise of shareholder primacy is to always operate in the interests of shareholders even though they are not the only group of corporation's constituents. Stakeholders consisted of employees, consumers, suppliers and creditors are another group of corporation's constituents. The basis for prioritizing the interests of shareholders over the interests of stakeholders has to with the claims that shareholders are the owners and sole residual claimants of corporations, but these claims are
