Corporate Governance and the Goal of the Firm: In Defense of Shareholder Wealth Maximization*

Forthcoming in the Financial Review

18 Pages Posted: 24 Jun 2016

See all articles by Diane K. Denis

Diane K. Denis

University of Pittsburgh - Katz School of Business

Date Written: June 23, 2016

Abstract

This essay is based on my keynote address at the 2016 annual meeting of the Eastern Finance Association. I propose that misunderstandings about the traditional model of corporate governance, with its emphasis on shareholder wealth maximization, contribute to negative societal attitudes about corporations. I discuss the implications of shareholder wealth maximization for other corporate stakeholders, the dangers of deviating from shareholder wealth maximization, and the roles that the media and the government play in the governance of corporations.

Keywords: Shareholder governance, Stakeholder governance

JEL Classification: G34, G38

Suggested Citation

Denis, Diane K., Corporate Governance and the Goal of the Firm: In Defense of Shareholder Wealth Maximization* (June 23, 2016). Forthcoming in the Financial Review, Available at SSRN: https://ssrn.com/abstract=2799939

Diane K. Denis (Contact Author)

University of Pittsburgh - Katz School of Business ( email )

368B Mervis Hall
Pittsburgh, PA 15260
United States
412-624-0296 (Phone)

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