Bill George, former CEO of Medtronic. 
Bill George, former CEO of Medtronic.  - 
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Marketplace

In our series "The Price of Profits," we're exploring corporations. What are they for? Whom are they for? And how that impacts the economy and you.

Bill George is the senior fellow at the Harvard Business School and the former CEO of Medtronic. During his time as CEO, George took a long-term approach to growing Medtronic into a booming business. He spoke with Marketplace host Kai Ryssdal about shareholder value and the problems with short-term thinking.

On the prevalence of shareholder-value thinking:

I think we've moved way too much towards what's called shareholder value and away from taking into account creating value for all your stakeholders. You've got to think about how you're creating values for your customers and in turn your employees. If you do that, well you'll have great value for your shareholders.

On the reporting requirements for companies:

I think we should take the Warren Buffet approach at looking at the underlying financial metrics and not trying to meet the stock markets expectations. I always told the stock market 'those are your expectations, my job is to build the company and achieve the goals we've announced to you.' But I do think we should report quarterly. I think it's a good discipline and because it gives investors a current look at what's happening.

On companies engaging in buybacks:

There's no evidence that in the long term buying back stock increases the stock price. If companies have excess cash, like say Apple does, I think it can be a very good thing to give some of that excess cash back to the shareholders. But if you're depleting your ability to invest in research and development, in capital expenditures, in expansion or acquisitions, I think it's a mistake.

Click the audio player above to listen to the full interview. 

As a side-note: Bill George was chairman of the board of Medtronic from 1996 until 2002. The current chairman and CEO of Medtronic, Omar Ishrak, is on the board of trustees of American Public Media, the parent company of Marketplace.

"The Price of Profits," our series with Business Insider, looks at what happens when profits become a company’s product. For more, visit priceofprofits.org.

Follow Kai Ryssdal at @kairyssdal