53 Pages Posted: 17 Feb 2006 Last revised: 19 May 2015
Date Written: September 2, 2009
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: 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