Hello David
I used to own a small business so at that time I was a CEO and a shareholder rolled into one so both interests were aligned.
Now I am a consultant to larger organizations where the CEO and the shareholders are different, creating what they call the "Principal Agent Problem".
Over the years I have followed the debate you describe so elegantly with interest as I have seen it from a number of perspectives.
I firmly believe that the only role of the CEO, his management team, and the Board should be to maximize shareholder value.
What is missing is for shareholders to ensure that the CEO and the Board of Directors are acting in their best interest, and not in the CEO's best interest.
Best interest has many definitions which should be defined by the shareholders, ranging from growing the top line, improving the bottom line, and if that is what they need, buying back shares, or even going private.
Shareholders need to manage the CEO who in turn needs to manage the company on behalf of the shareholders.
Speaking of activist investors - lord knows we need more of them, particularly in Canada where I live where the old boys clubs need to be retired - see the excellent example of CP Rail and Bill Ackman.
I think that trying to make a profit should be a good thing for any business, and investors in those businesses should make a profit from their shares.
Capitalism, anyone?
Best wishes and thanks for reigniting the debate
Savio