How the “Maximise Shareholder Value” Myth Weakens Companies and Economic Systems

Unfortunately, the modern cult of “shareholder value” privileges the interests of the shareholding subsystem over the interests of the corporate entity as a whole. The result has been an obsessive focus on raising share price in many public companies that may be threatening their ability to survive. If you look back at the last quarter-century, with the rise shareholder value ideology – now hardwired into a number of federal securities regulations and tax code rules –you will also see declining numbers of public companies, dramatically reduced corporate life expectancy, and reduced long-term returns for shareholders themselves.