The Shareholder Value Myth

How Putting Shareholders First Harms Investors, Corporations, and the Public

Lynn Stout (Author)

Publication date: 05/07/2012

The Shareholder Value Myth
In this radical debunking of pervasive myths about how corporations and investors behave, UCLA professor and legal celebrity Lynn Stout shows how—contrary to entrenched belief—"shareholder primacy" is not mandated by corporate law and actually harms shareholders themselves.Executives, investors, and the business press routinely chant the mantra that corporations are required to “maximize shareholder value.” In this pathbreaking book, renowned corporate expert Lynn Stout debunks the myth that corporate law mandates shareholder primacy. Stout shows how shareholder value thinking endangers not only investors but the rest of us as well, leading managers to focus myopically on short-term earnings; discouraging investment and innovation; harming employees, customers, and communities; and causing companies to indulge in reckless, sociopathic, and irresponsible behaviors. And she looks at new models of corporate purpose that better serve the needs of investors, corporations, and society.

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Book Details
Overview
In this radical debunking of pervasive myths about how corporations and investors behave, UCLA professor and legal celebrity Lynn Stout shows how—contrary to entrenched belief—"shareholder primacy" is not mandated by corporate law and actually harms shareholders themselves.Executives, investors, and the business press routinely chant the mantra that corporations are required to “maximize shareholder value.” In this pathbreaking book, renowned corporate expert Lynn Stout debunks the myth that corporate law mandates shareholder primacy. Stout shows how shareholder value thinking endangers not only investors but the rest of us as well, leading managers to focus myopically on short-term earnings; discouraging investment and innovation; harming employees, customers, and communities; and causing companies to indulge in reckless, sociopathic, and irresponsible behaviors. And she looks at new models of corporate purpose that better serve the needs of investors, corporations, and society.

About the Author
Excerpt

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