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Shareholder Value: Principles, Declarations, And Actions

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Executive Summary

This paper is about shareholder value. The authors review arguments in its favor, inquire whether managers commit at least verbally to it, and ask whether those who do commit also perform better. They argue that competitive markets do not necessarily force firms to seek higher shareholder value, and that this goal is ill defined to begin with. Yet corporate targets are ultimately an empirical matter. They report evidence from a large sample of listed firms across the world that many managers are not even willing to pay lip service to shareholder value, let alone declare it their top priority.

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