A rational approach to shareholder value
01 September 2014
There is a fundamental flaw in the current understanding of the concept of shareholder value
For many years, directors of quoted companies have declared that the primary objective of their company is ‘to maximise shareholder value’. Interestingly, however, they never explain how it fits into corporate governance, in terms of:
- how the objective is translated into a decision making criterion
- how they monitor their achievement in this regard
-
how they explain variations over time
Ask such directors to define shareholder value, and the majority will say that it equates to...
Do you need access?
Some Governance + Compliance articles are only available to subscribers
Don’t fall behind. Choose your route.
Become an Affiliate member Subscribe to Governance + Compliance magazine