Shareholder Value: Principles, Declarations, and Actions

Authors

  • Claudio Loderer,

    1. Claudio Loderer is a Professor of Finance at the Institut für Finanzmanagement, Universität Bern, Engehaldenstrasse 4, 3012 Bern, Switzerland.
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  • Lukas Roth,

    1. Lukas Roth is an Assistant Professor of Finance at the University of Alberta, School of Business, Edmonton, Alberta, Canada, T6G 2R6.
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  • Urs Waelchli,

    1. Urs Waelchli is an Assistant Professor of Finance at the Institut für Finanzmanagement, Universität Bern, Engehaldenstrasse 4, 3012 Bern, Switzerland.
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  • Petra Joerg

    1. Petra Joerg is the Managing Director of the Rochester-Bern Executive MBA Program, Engehaldenstrasse 4, 3012 Bern, Switzerland.
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  • We wish to thank an anonymous referee and the editor (Bill Christie) for the great criticism and suggestions, and Wendy Jennings and Nancy Macmillan for the wonderful editorial help. We received many valuable comments from Max Bazerman, Lucian Bebchuk, Demian Berchtold, Sabine Boeckem, Ingolf Dittmann, Espen Eckbo, Jean Helwege, Christoph Hinkelmann, Andrew Inkpen, Mike Jensen, David Kelsey, Diego Liechti (especially), John McConnell, Frank Milne, Bob Monks, Ted Moorman, Urs Peyer, Caspar Rose, Carolina Salva, Steve Sharpe, Holger Spamann, Matthew Spiegel, Meir Statman, Mich Tvede, John Wald, Jim Walsh, Dariusz Wojcik, Yin-Hua Yeh, Jonas Zeller, Joachim Zietz, and the participants at the 2008 Conference on Corporate Governance in Birmingham, the 2008 FMA European Conference in Prague, the 2008 EWGFM Meetings in Stockholm, the 2007 FMA Meetings in Orlando, the 2006 Conference on Politics of Corporate Governance in Copenhagen, and the 2005 European Financial Management Symposium on European Corporate Governance in Leeds. We are grateful to Regula Baertschi, Simon Fuhrer, Corina Steiner, and Manuela Strasser for research assistance. This article represents the views of the authors and all errors are ours.

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.

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