(MONEY Magazine) – I don't know about your company, but at mine we've been hearing a lot about values lately. The talk has come in the wake of the attack on the World Trade Center--an act that, among its many other consequences, has caused millions of Americans to think hard about what really matters in life. Post-Sept. 11, frivolity has seemed, well, frivolous. Getting ahead at the office has suddenly mattered less than spending time with family. Ego has given way to the desire to be connected to a larger community. And, at least at first, some of those same shifting priorities surfaced at American companies. Here, for instance, is a small excerpt from an e-mail, typical of many that were sent all across corporate America in the weeks following the WTC attack. This one was written by Gerald Levin, the CEO of my own company, AOL Time Warner: "The events of the last few weeks have swept away extraneous concerns. They've clarified our priorities, and simplified our focus," he wrote. "The very things the terrorists seek to destroy--diversity of opinion, artistic expression, cultural and religious pluralism, civic dialogue, journalistic independence, creative freedom, the open flow of ideas, information and images--are AOL Time Warner's reasons for being."

I had two immediate reactions to that memo. First, as an employee, I felt a surge of pride that surprised me. David Pottruck, the co-CEO of Charles Schwab & Co., has long preached that happy employees are motivated employees, and that motivation is about much more than money. It's about instilling a sense of mission. Back when stock options were the only motivation anyone seemed to care about, people rolled their eyes when Pottruck started in on the importance of mission. Now it seems obvious that he was right.

Then came what you might call the knee-jerk business-journalist reaction. True, Time Inc.'s founder, Henry Luce, felt so strongly about the pre-eminence of journalism over profits that he actually wrote something to that effect in his will. Still, there is not much question that the modern AOL Time Warner has been maniacally focused on growth and profits. Where, in Levin's clarified priorities and simplified focus, was the mention of profit? Where was double-digit growth? Where was the importance of creating shareholder value? They were nowhere to be found. Yet hadn't we all been taught that shareholder value was the highest value a corporation could aspire to? And wasn't that the standard by which we judged a company's performance--whether the stock went up?

It seemed to me that Levin was suggesting, implicitly at least, that companies exist to do more than give shareholders a return on their investment. And while I certainly don't expect him to hew to this position for long--in fact, the pressures of the marketplace have already reasserted themselves--I wound up thinking that here was a question we should be taking up collectively. It is a question that most of us thought had been settled during the great bull market of the 1980s and 1990s but seems much less so in the aftermath of the terrorist attacks. The question is: Do companies have responsibilities that go beyond their responsibility to shareholders?

Paternalism takes a hit

I distinctly recall the first time I heard someone say companies existed to make money for their shareholders. It was the spring of 1982, and the speaker was a Texas oilman I'd just met. His name was T. Boone Pickens Jr.; though I didn't yet know it, he was just months away from making his first hostile tender offer for a big company and becoming, in effect, the original corporate raider.

What I remember thinking at the time--listening to him go on about how the people at the top in corporate America were mere stewards for the true owners, the shareholders--was how alien this concept was! Like most people, I associated "ownership" with "management." But beyond that, like most people, I took it for granted that companies were responsible for lots of things beyond their share price. They were supposed to keep employees employed, for one thing. In most communities, they were also the primary backers of the symphony and other civic institutions. They made and sold products, of course--but the link from that basic economic activity to the rise and fall of the stock price was a fuzzy and undefined thing. They were, at bottom, paternalistic organizations.

But when you made this argument to corporate raiders like Boone--when you said that companies had "stakeholders" to look out for, not just stockholders--they just rolled their eyes. The central belief of the raiders, echoing economists from Adam Smith to Milton Friedman, was that by putting the shareholder front and center, corporations would ultimately help everybody--by making the economy more competitive and the society more prosperous. Yes, focusing on the share price would force CEOs to become more tough-minded about how they ran their businesses and less paternalistic in their outlook. They would no longer fund pet projects that weren't working, or hold on to unprofitable divisions, or support lifetime-employment policies that caused the staff to balloon beyond reason. Yet their ruthlessness in making tough decisions, however painful to those directly affected, would redound to the economy's benefit, because they would allow companies to grow faster and fuel economic growth.

Today nobody argues with this theory--and why would they? In short order, this tougher, more Darwinian way of thinking about American companies went from radical theory to conventional wisdom. And as it took hold, so did the great bull market of the 1980s and '90s. The link between the two seems indisputable. Creating shareholder value has indeed turned out to have enormous benefits, despite the short-term hardships it created. My own favorite example is IBM, a company that until the mid-1980s guaranteed lifetime employment to its 400,000-plus workers. In the age of corporate paternalism, this was seen as a Good Thing. But as IBM was battered by nimbler competitors, its refusal to slim down nearly killed the company. It was only when IBM finally abandoned that policy--and shrank by half--that it began the process of renewal and revival that made it one of the best-performing big companies of the last half-dozen years. Case closed.

The side effects of shareholder value

Or is it? Let's think a little bit harder about our fixation on shareholder value. For all the demonstrable good it's done, it has also had its share of odious side effects. Is it really all that healthy, for instance, that our society made a heroic figure out of a brute like "Chainsaw Al" Dunlap--a man who took unseemly pleasure in firing people to make the stock price go up (and, in the process, enriching himself)? Is it all to the good that companies eradicated R&D departments to cut costs? Or that they spent more time engaging in legal but unseemly financial shenanigans to beat estimates by a penny every quarter than they did creating and selling new products?

If postwar paternalism was one form of corporate excess, can we now say the same about the current mania for shareholder value? That's always been part of capitalism in this country too--trends that at first make sense wind up becoming dogma, carried to such extremes that the original rationale gets lost. Until, that is, some outside event catches us up short, and causes us to rethink the original premise.

For me, that event took place on Sept. 11. On the one hand, we saw acts of genuine corporate valor and largesse--for instance, the willingness of competitors to Sandler O'Neill, a small Wall Street firm that lost a third of its employees, to turn over commission revenues to help keep the firm in business. We saw media companies take hundred-million-dollar hits because gathering and presenting the news was their first priority.

But we also saw Morgan Stanley--a firm with almost 3,000 people who somehow managed to escape one of the World Trade Center towers--announcing just two weeks later a big round of layoffs. Yes, I know, it's rough on Wall Street right now, and Morgan Stanley has to stay competitive. But still.... Suddenly a move done in the name of shareholder value--a move I would have shrugged off a few months earlier--seemed horribly callous.

I'm not here to argue that companies should abandon shareholder value. Not at all. But I do think there is a place for a little corporate paternalism, especially at times like these. In the end, companies do owe something to their communities, their employees and their country--and Sept. 11 has reminded us of that. Return on investment is an important goal. But the only goal? I'm not buying it. Not anymore.

Joseph Nocera, editor-at-large at Fortune and author of A Piece of the Action, can be reached at big-picture@moneymail.com.