European University Institute Library

The shareholder value myth, how putting shareholders first harms investors, corporations, and the public, Lynn Stout

Summary
Executives, investors, and the business press routinely chant the mantra that corporations are required to "maximize shareholder value." The results have been disastrous. "Shareholder primacy" thinking causes corporate managers to focus myopically on short-term earnings reports at the expense of long-term performance; discourages investment and innovation; harms employees, customers, and communities; and causes companies to indulge in reckless, sociopathic, and socially irresponsible behaviors. It's the kind of thinking that led directly to the recent worldwide economic collapse. Jack Welch, once a shareholder primacy true believer, has famously called it "the dumbest idea in the world." Lynn Stout proves that there is in fact no legal obligation for corporations to maximize shareholder value-scholars, lawyers, and corporate officers just assumed there was. Nor, she demonstrates, is maximizing shareholder value the optimal economic model-that's just another unproven assumption, one that is conceptually muddled and, Stout shows, unsupported by the actual evidence on what drives good corporate performance. As if this wasn't enough, Stout also shows how shareholder primacy actually hurts individual investors by obscuring their real, diverse, human interests in the name of serving a hypothetical, homogeneous, abstract, and conscienceless shareholder. Stout looks at new theories that better serve the needs not only of actual human beings who invest but of corporations and society as well.--, Provided by publisher
Language
eng
Literary Form
non fiction
Edition
First edition.
Physical Description
vi, 134 pages, 22 cm.
Isbn
9781605098135

Library Locations

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    Via dei Roccettini 9, San Domenico di Fiesole, 50014, IT
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