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Shareholder Value: Principles, Declarations, and Actions

53 Pages Posted: 17 Feb 2006 Last revised: 19 May 2015

Claudio F. Loderer

University of Berne - Institute for Financial Management; European Corporate Governance Institute (ECGI)

Lukas Roth

University of Alberta - Department of Finance and Statistical Analysis

Urs Waelchli

Rochester-Bern Executive Programs; University of Rochester - Simon Business School

Petra Joerg

University of Berne - Institute for Financial Management

Date Written: September 2, 2009

Abstract

This paper is about shareholder value. We examine whether welfare considerations justify that target and whether competitive markets force firms to pursue it. We also argue that shareholder value is strictly an ill-defined goal. We report evidence from a large sample of listed firms across the world that many managers do not even mention shareholders in their mission statements. However, firms that do disclose a commitment to shareholders seem to perform better in terms of stock price and operating performance.

Notes: Previously titled 'The Purpose of the Corporation: Shareholder-Value Maximization?'

Keywords: Shareholder value, corporate target, corporate governance

JEL Classification: G30, K00, L20

Suggested Citation

Loderer, Claudio F. and Roth, Lukas and Waelchli, Urs and Joerg, Petra, Shareholder Value: Principles, Declarations, and Actions (September 2, 2009). ECGI - Finance Working Paper No. 95/2005. Available at SSRN: https://ssrn.com/abstract=1099936 or http://dx.doi.org/10.2139/ssrn.690044

Claudio F. Loderer (Contact Author)

University of Berne - Institute for Financial Management ( email )

Engehaldenstrasse 4
Bern, CH-3012
Switzerland
+41 31 631 37 75 (Phone)
+41 31 631 84 21 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Lukas Roth

University of Alberta - Department of Finance and Statistical Analysis ( email )

2-32E Business Building
Edmonton, Alberta T6G 2R6
Canada
780-492-4431 (Phone)
780-492-3325 (Fax)

Urs Waelchli

Rochester-Bern Executive Programs ( email )

Engehaldenstrasse 4
Bern, 3012
Switzerland

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States

Petra Joerg

University of Berne - Institute for Financial Management ( email )

Engehaldenstrasse 4
Bern, CH-3012
Switzerland

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