Journal
CRITICAL PERSPECTIVES ON INTERNATIONAL BUSINESS
Volume 4, Issue 1, Pages 55-+Publisher
EMERALD GROUP PUBLISHING LTD
DOI: 10.1108/17422040810849767
Keywords
Shareholder value analysis; Wealth; Corporate governance
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Purpose - The purpose of this paper is to examine the claim that the pursuit of maximum value (wealth) for shareholders optimises 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. Originality/value - This paper draws from an unusually wide range of disciplines to expose the fallacy and a number of powerful myths about the economic and social benefits of making maximizing shareholder value the primary aim of corporate governance.
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