Maximizing Shareholder-Value: A Panacea for Economic Growth or a Recipe for Economic and Social Disintegration?
Critical Perspectives on International Business, Vol. 4.1, pp. 55-74, 2008
32 Pages Posted: 1 Jul 2010
Date Written: Feburary 19, 2008
Purpose - To examine the claim that the pursuit of maximum value (wealth) for shareholders optimizes economic and social benefits for society as a whole.
Design/methodology/approach - Evidence cited in support of the claim and the methodology employed by its supporters are examined. Counter-evidence from a wide range of disciplines, including accounting, economics, finance, and medical sociology, is considered.
Findings - The evidence does not support the claim. Bias and severe methodological flaws in its supporters' research is revealed. Considerable evidence of adverse consequences is identified.
Keywords: Shareholder value, wealth inequality, corporate governance, capital markets, financial markets
JEL Classification: L21, A11, A13, A14, D21, D81, G1, G3
Suggested Citation: Suggested Citation