The Shareholder Value Myth

by Lynn Stout
The Shareholder Value Myth cover
Good Books rating 4.08
Business and Economics
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  • ID: 8274
  • Added: 2025-12-21
  • Updated: 2025-12-21
  • ISBN: 9781459638693
  • Publisher: ReadHowYouWant
  • Published: 2012-05-01
  • Reviews: 3

The Shareholder Value Myth debunks the myth that shareholder primacy is the best approach for corporate success. Written by a distinguished legal scholar, the book argues that this widely accepted belief has no basis in law or economics and does not necessarily lead to better financial results. It explores the relationship between shareholders and corporations, suggesting more effective ways to think about this dynamic. The book provides a critical examination of current business practices and offers insights into how corporations can better serve all stakeholders, not just shareholders. By challenging conventional wisdom, it opens up new avenues for thinking about corporate governance and long-term success.

Reviews
The Centre for Ethics and the Market · Andrei Rogobete · 2023-01-01
persuasive 4.25

The book makes a compelling case that focusing solely on share price can lead to ruthless management behavior. It argues for a broader understanding of corporate purpose.

Andrei Rogobete's review emphasizes how the book effectively argues that a narrow focus on share price can result in detrimental management practices. The reviewer appreciates the book's exploration of how this narrow focus can lead to unethical behavior and short-term thinking. Rogobete highlights the book's call for a more comprehensive understanding of corporate purpose, one that considers the interests of all stakeholders. The reviewer finds the book's arguments compelling and well-supported, making it a valuable contribution to the ongoing debate about corporate governance.

Quick quotes

    Professor Stout makes a compelling case that the 'narrow' focus on share price alone can result in ruthless management behaviour.

    The drive for extreme cost-cutting and short-term gains can lead to unethical practices and neglect of other important stakeholders.

    The book offers a more nuanced view of corporate purpose, one that considers the interests of all stakeholders.

Goodreads · 2023-01-01
thought-provoking 4.00

The book challenges the belief that a company's sole purpose is to maximize shareholder wealth. It offers an alternative perspective on corporate purpose.

This Goodreads review highlights how the book effectively challenges the widely held belief that a company's sole purpose is to maximize shareholder wealth. The reviewer appreciates the book's exploration of alternative models of corporate purpose, which consider the interests of all stakeholders. The book's arguments are well-supported and thought-provoking, making it a valuable read for anyone interested in corporate governance. The reviewer finds the book's critique of shareholder primacy particularly compelling and believes it offers a more balanced approach to corporate decision-making.

Quick quotes

    The book challenges the belief that a company's sole purpose is to maximize shareholder wealth.

    It offers an alternative perspective on corporate purpose, one that considers the interests of all stakeholders.

    The book's arguments are well-supported and thought-provoking, making it a valuable read for anyone interested in corporate governance.

CorpGov · 2012-06-26
insightful 4.00

The book argues that the focus on maximizing shareholder value leads to short-term thinking and can be detrimental to companies. It challenges the idea that corporate law mandates shareholder primacy.

This review highlights how the book effectively critiques the widely accepted notion that a company's primary goal should be to maximize shareholder value. The author points out that this focus can lead to harmful short-term thinking and neglect of other important stakeholders. The book also debunks the myth that corporate law requires shareholder primacy, offering a more nuanced view of corporate purpose. The reviewer appreciates the book's thorough analysis and its call for a more balanced approach to corporate governance.

Quick quotes

    Stout is right in her fundamental analysis that maximizing shareholder value is a mantra that has generally contributed to short-term thinking.

    The book shows how the ideology of shareholder value maximization lacks any solid foundation in corporate law, corporate economics, or the empirical evidence.

    This book debunks the myth that corporate law mandates shareholder primacy and explores better models of corporate purpose.

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