A Critique of Shareholder Value Maximization

Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique

Many scholars and managers endorse the idea that the primary purpose of the !rm is to make money for its owners. This shareholder wealth maximization objective is justi!ed on the grounds that it maximizes social welfare. In this article, the !rst of a two-part set, we argue that, although this shareholder primacy model may have been appropriate in an earlier era, it no longer is, given our curr...

Shareholder, stakeholder-owner or broad stakeholder maximization

With reference to the discussion about shareholder versus stakeholder maximization it is argued that the normal type of maximization is in fact stakeholder-owner maximization. This means maximization of the sum of the value of the shares and stakeholder benefits belonging to the dominating stakeholder-owner. Maximization of shareholder value is a special case of owner-maximization, and only und...

Negotiated Shareholder Value :

Negotiated Shareholder Value: The German Version of an Anglo-American Practice

Maximising Shareholder Value

Should a Company Pursue Shareholder Value?

What is the appropriate objective function for a firm? We analyze this question for the case where shareholders are prosocial and externalities are not perfectly separable from production decisions. We show that maximization of shareholder welfare does not necessarily equate to maximization of long-term shareholder value. We also show that the first objective is not sustainable in the presence ...