Maximizing shareholder-value A panacea for economic growth or a recipe for economic and social disintegration?

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.