The book is divided into two parts Debunking the shareholder value myth and exploring what shareholders really value. Maximizing shareholder value is the dumbest idea in the world The only valid purpose of a firm is to create a customer Others care only about their own material returns In his final shareholder letter, jeff bezos explains a profoundly simple lesson most leaders overlook bezos explains why your goal should be to 'create value,' and how to do exactly that.
Shareholder value is a business buzzword How much is your company worth to its owners It's more than a number It's a goal, a measure of success We explore what makes it tick, how to boost it, and why it matters Defining shareholder value shareholder value represents the financial return generated for a company's owners
While economists typically justify maximising shareholder value on the basis of economic efficiency arguments, vermaelen wants to give an ethical twist to this He proposes a new definition of ethical behaviour in business that is less tied to highly personal values How to create value for shareholders **one of the most effective ways to create value for shareholders is by focusing on maximizing profitability and growth By increasing revenues, minimizing costs, and strategically investing in opportunities for expansion, companies can generate higher returns for their shareholders. The failure of shareholder value thinking as a result, over the decades since its birth, shareholder value theory has not only failed on its own narrow terms of making money for shareholders.
The shareholder value myth has its roots in the philosophical and ideological aspects of corporate governance Milton friedman's 1970 article the social responsibility of business is to increase its profits argued that businesses have a sole responsibility to maximize shareholder value.
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