Shareholder Value: Principles, Declarations, and Actions

Loderer, Claudio F.; Roth, Lukas; Waelchli, Urs; Joerg, Petra

doi:10.2139/ssrn.690044

Shareholder Value: Principles, Declarations, and Actions

ECGI - Finance Working Paper No. 95/2005

53 Pages Posted: 17 Feb 2006 Last revised: 19 May 2015

See all articles by Claudio F. Loderer

Claudio F. Loderer

University of Berne - Institute for Financial Management; European Corporate Governance Institute (ECGI)

Lukas Roth

University of Alberta - Department of Finance and Statistical Analysis; European Corporate Governance Institute (ECGI)

Urs Waelchli

Rochester-Bern Executive Programs; University of Rochester - Simon Business School

Petra Joerg

University of Berne - Institute for Financial Management

Date Written: September 2, 2009

Abstract

This paper is about shareholder value. We examine whether welfare considerations justify that target and whether competitive markets force firms to pursue it. We also argue that shareholder value is strictly an ill-defined goal. We report evidence from a large sample of listed firms across the world that many managers do not even mention shareholders in their mission statements. However, firms that do disclose a commitment to shareholders seem to perform better in terms of stock price and operating performance.

Note: Previously titled 'The Purpose of the Corporation: Shareholder-Value Maximization?'

Keywords: Shareholder value, corporate target, corporate governance

JEL Classification: G30, K00, L20

Suggested Citation: Suggested Citation

Loderer, Claudio F. and Roth, Lukas and Waelchli, Urs and Joerg, Petra, Shareholder Value: Principles, Declarations, and Actions (September 2, 2009). ECGI - Finance Working Paper No. 95/2005, Available at SSRN: https://ssrn.com/abstract=1099936 or http://dx.doi.org/10.2139/ssrn.690044