Challenging the Long-Held Belief in ‘Shareholder Value’ – NYTimes.com

Challenging the Long-Held Belief in ‘Shareholder Value’ – NYTimes.com.

nader nazemi

Lynn A. Stout, a professor at Cornell Law School, argues that companies have empowered hedge funds that push for short-term solutions.

This is a very interesting expose on shareholders and their relationship with the Firm.
It’s a bedrock principle of our era: Companies should be run for the sole purpose of increasing their stock prices, or returning “value” to shareholders, the ultimate “owners.”
To Lynn A. Stout, however, it amounts to nothing more than a “shareholder dictatorship.”
Ms. Stout, a professor at Cornell Law School, has authored a slim and elegant polemic, “The Shareholder Value Myth” (Berrett-Koehler Publishers) to explain the idea’s two problems: It’s worked out horribly, and as a matter of law, it’s not true.
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