Shareholder Value

The goal of the firm is to maximize shareholder value. While most firms devote their main efforts to exploit financial value drivers such as mergers and ac- quisitions, not enough attention is being paid to managerial value drivers like re- ducing time to market, increasing throughput, or improving logistics, operations and supply chain management, although these managerial drivers have a

Es war eine deutliche Mehrheit des schweizerischen Nationalrats, die sich in der Wintersession 2019 für die Begünstigung langfristiger Aktionärsbeteiligungen aussprach. Der Rat schuf im Rahmen der Aktienrechtsrevision die Möglichkeit zur Einführung von Vorzugsrechten für langfristig beteiligte Aktionäre. Spätestens seit diesem Beschluss sind solche Vorzugsrechte unter dem Begriff Loyalitätsaktien Gegenstand der breiten rechtspolitischen Diskussion zur Weiterentwicklung des schweizerischen Aktienrechts.

Die Idee aktienrechtlicher Mittel zur Förderung und Begünstigung langfristiger ktionärsbeteiligungen ist aber nicht neu. Sie entsprang den Bedenken über die Folgen kurzfristiger Orientierung im Kapitalmarkt und beschäftigt Wissenschaft und Politik weltweit schon seit geraumer Zeit. In ausländischen Rechtsordnungen gibt es bereits seit einigen Jahren Gesetzesbestimmungen zur Privilegierung langfristiger Aktionäre. Das Konzept hat auch in der Schweiz von verschiedenen Seiten Zuspruch erhalten. Trotzdem ist die Skepsis gegenüber diesem noch ungewohnten Konzept gross. Zum einen beurteilt die Lehre die Zulässigkeit von Vorzugsrechten für langfristige Aktionäre nach geltendem Recht mitunter kritisch. Zum anderen wurden im Parlament Bedenken zu den Auswirkungen von Loyalitätsaktien geäussert.

Im vorliegenden Beitrag werden diese Vorbehalte adressiert. Es wird aufgezeigt, dass sich Loyalitätsaktien zur Förderung und Begünstigung langfristiger Aktionärsbeteiligungen eignen.

-----

It was a clear majority of the Swiss National Council that voted in favor of fostering long-term investment by shareholders in summer 2018. The National Council adopted a regulatory proposal in the context of the revision of Swiss company law that aims at authorizing corporations to provide long-term shareholders with priority rights. Ever since, privileges for long-term shareholders have become a topic of scholarly and public debate on the further development of corporate law in Switzerland.

Switzerland is not the first country to develop a legal framework to promote and reward long-term investment by shareholders. The reason for those ambitions are concerns regarding the negative impact of stock market short-termism on corporations and the entire economy. Other countries in Europe have more or less recently adopted laws and regulations favoring long-term shareholders. The concept has gained considerable support among legal scholars, investors and large publicly owned companies in Switzerland. Nevertheless, there are reservations regarding this relatively unknown approach. One the one hand, legal scholars have reservations as to the legal admissibility of loyal shares under current Swiss law. On the other hand, Members of Parliament have expressed reservations as to the impact of loyalty shares on companies and the economy.

The present contribution addresses these reservations. It shows that loyalty shares have potential to contribute to promoting long-term investment by shareholders.

The development of digital business is predicted to develop rapidly along with advances in information technology, including in the tourism sector. This study aims to prove the influence between stakeholder orientation, strategic capability, and shared value creation on competitiveness through digital business strategies in cultural tourism destinations in Banten Province. Cultural tourism destinations are the unit of analysis in this study, while the observation unit is the tourism stakeholder in eight cities in Banten Province, totaling 322 respondents. This type of research is descriptive verification, where the method used is a descriptive survey in a case study with hypothesis testing analysis. The method used in this research is survey method and quantitative method. The author uses structural Equation Modeling (SEM) using Lisrel software in data processing. This study shows an influence between stakeholder orientation, strategic capability, and shared value creation on compet...

In 2013 DELL announced that it would go private after being publically traded for more than twenty-four years on the stock exchange (Gugliemo 2013). This paper identifies that this strategic move on behalf of DELL management cannot be adequately analysed and understood by the ‘productionist’  concepts of ‘commodity’ and ‘product’ chain (Porter 1985; Gereffi 1996, 2002). On the basis of DELL’s openly available fiscal reports (2008- 2012) I suggest that DELL lacked a coherent corporate strategy during the last period. This is primarily due to the short-term pressures that ‘financialisation’ places on management. The move to go private must be understood as a way to develop a longer term strategy without the pressures to deliver ‘shareholder value’.

This paper looks into British Parliament's decision to codify director's duties by passing the Companies Act 2006.

The UK is a common law country, and common law is largely un-codified, which means that judicial decisions are made on the basis of precedent where the authoritative source of law is developed through the principle of stare decisis which has the intention of providing certainty, fairness and consistency to the legal process. Previous decisions are then kept in the records of the court and historically documented in collections called ‘yearbooks and reports’. This method of building on itself seems to be the reason why common law is so effective and able to adapt to the changing needs of society with such ease.

However, while common law has proven to be versatile in its ability to adapt, some critics have argued that the law is difficult to comprehend by the common man, and the trending tied is for an increase in transparency and awareness. So it would seem that while common law has served the UK business community well, through codifying directors’ duties, it was Parliament’s intention to make the law more comprehendible and transparent to the common businessman.

This paper seeks to critically discuss Parliaments’ decision and determine whether this is a disruptive change or whether it is business as usual.

This paper develops an alternative (or supplementary) theoretical justification for the regulation of corporate social responsibility (CSR) and social and environmental accounting and reporting (SEAR) to the justification contained in the extant academic literature. It does this by demonstrating how, contrary to the dominant business discourse, increased regulation designed to protect the social and environmental interests of a range of stakeholders can also serve to enhance corporate economic performance and shareholder value.The theoretical perspectives developed in this paper are drawn from Beck's and Giddens’ theories on reflexive modernity, and indicate that reflexively appropriated knowledge can be a key factor in developing socially constructed understandings of the social and environmental risks to a range of stakeholders inherent in business operations.In situations where voluntary self-regulation of CSR and SEAR has been ineffective in preventing corporate actions and decisions that have resulted in damaging social and environmental consequences, processes of reflexivity can substantially increase public awareness of the level of risk they face from corporate operations. Such increased perceptions of risk can lead to a loss of trust in an individual corporation or a whole industrial sector, and this can be exacerbated where stakeholders begin to actively seek out alternative risk discourses to inform themselves about possible risks of which they were previously unaware. We argue that effective statutory regulation could avoid these outcomes, and the loss of shareholder economic value that can flow from these outcomes.

Implicit in the decision process of corporate leaders is a central question: what and who is this business here for? Many subscribe to the belief that the primary goal of leadership is to maximize shareholder value.... but the shareholder-first approach that originated and prevails in the Anglo/US world has received heavy criticism from a number of well-regarded management researchers. ....the focus on short-term profits discourages long-term thinking, investing, and planning.... Respected thinkers offer another answer to the question about the purpose of a business: the firm should see itself as an interdependent part of a community that consists of multiple stakeholders whose interests are integral to business success.... in turn, this interdependency helps the firm be sustainable and resilient.

Merger literature suggests that the relationship between shareholder gains and the relatedness of merging firms is contingent upon the compatibility of the two firms' top management cultures. This hypothesis is tested by surveying the perceptions of cultural differences of top management teams of recently acquired firms, and then relating these perceptions to related stock market gains to the buying firms. The findings suggest a strong inverse relationship between perceptions of cultural differences and shareholder gains, after controlling for perceptions of the buying firm's tolerance for multiculturalism and the relative size of the merging firms.

In this paper, the author investigated the influence of management decisions like capital structure, dividend
policies, remunerations, credit policy decisions and investment decisions on shareholder wealth maximization.
The main objective of this paper is to increase awareness and relationship between management and
shareholders of the companies. To achieve the objective, portfolio theory, capital asset pricing model and
modern financial theory providing evidence on the linkage between management decisions to shareholder’s
value. Shareholders are only concerned about the value of shares of the company and the amount of return in
the form of dividend paid. Thus in order to meet the demands of the shareholders of the company, managers
needs to increase their abilities and skills to overcome the organizational goals. Thus the main goal of this
paper is to discuss on the role of management decisions towards increasing shareholder’s wealth and meet
organizational goals.

In this article, we employ a Veblenian framework to analyze three dimensions of corporate financialization: the expansion of the balance sheet, the rising importance of intangible assets and the growing levels of financial payouts. Our focus is the pharmaceutical sector, which is strongly dominated by a handful of large corporations known as Big Pharma. In our empirical analysis of the financial accounts of 27 of the largest global pharmaceutical corporations for the years 2000–2018, we find evidence of a shift in Big Pharma’s business model from one focused on productive capacity (reflected by fixed capital and R&D) to one focused on intangible assets (reflected by patents, brands and goodwill). The modus operandi of Big Pharma is one that increasingly resembles that of a private equity fund that generates returns for shareholders that are supported by monopolized knowledge through intellectual property rights, capitalized future earnings potential and rising debt burdens. Our framework facilitates the study of the different elements of financialization and how they do (or do not) co-evolve over time, within and between industries, and between countries or global regions. 

Keywords: monopoly, Thorstein Veblen, intangible assets, shareholder value, corporate finance


We survey the recent developments in the literature on corporate diversification. This literature is voluminous, diverse, and quite old. To make the task more manageable, we focus our attention on recent contributions to that subset of the diversification literature that is in our judgment most influential in setting the agenda for financial research. The study of diversification at the corporate level can be grouped into one of two bodies of literature: cross-sectional studies of the link between corporate diversification and firm value (i.e., the diversification discount) and longitudinal studies of patterns in corporate diversification through time. The prevailing wisdom among financial economists throughout much of the last decade has been that diversified firms sell at a discount and that the level of corporate diversification has been trending downward. However, recent research questions both these tenets and a number of studies now suggest that the diversification discount is either not due to diversification at all, or may be a result of improper measurement techniques. Furthermore, some researchers are now beginning to argue that previous attempts to assess changes in the levels of corporate diversification through time is also flawed as a result of biases built into the compustat database in combination with the use of noisy proxies for corporate diversification.

The globalization of media content has encouraged the growth of cross-cultural promotional channels; yet empirical evaluations of advertising strategies at an international level are sparse. This paper advances research in this emerging area by analyzing the global financial markets’ valuation of commercial sponsorships in Formula One (F1) motor racing. While previous research indicates U.S. markets approve of similar promotional investments, the results of this international event study demonstrate the market value of firms entering into F1 sponsorships decline upon announcement. The level of investment and nationality congruence of the sponsorship appear to enhance the probability for negative returns in shareholder value.

This article describes the track record of U.S. acquirors over the past 12 years and the factors that have differentiated successful transactions by equity investors. A key issue in any M&A transaction is that stock market reacts positively to the transaction in the short run whether the acquiror's stock outperforms its peers in the long run. Several studies found that most acquisitions fail to create value for acquirors. Further, there is huge variation in acquisition outcomes, from very positive to very negative, which suggests that acquisition execution can play a significant role in creating value.

Shareholder value maximization has spurred a long-standing and heated debate between the proponents of a unified corporate objective function and the supporters of multi-constituency goals of the corporation. We weigh in on the corporate purpose debate from a different point of view: that of the shareholders. Specifically, we seek to critically assess the assumptions about shareholders embedded in the shareholder value maximization doctrine and examine the implications of three contemporary shareholding practices: (a) shareholders investing concurrently in competing firms, (b) residual-risk bearing decoupling, and (c) heterogeneous shareholder interests. Our critique draws out the challenges that contemporary shareholder practices pose for corporate governance and highlights the need for strategic corporate governance, or governance policies and practices that prioritize the sustainable competitive advantage of the firm.

Companies are not only members of civil society but are also integral and essential parties to the socio-economic context in which they develop. It is thus legitimate to wonder about their role and "societal" responsibility. The concept of corporate social responsibility is the idea that private companies are supposed to care not only about short-term profit in the interest of their shareholders and management, but also about other stakeholders and sustainable development. It has recently become clear that no corporation can ignore the negative impact that could result for it if it does not behave in a CSR compliant manner. Thus the issue has also to do with risk mitigation. Corporate governance emerges as an important avenue for inte

The financialization of housing has been increasingly identified as an important driver of social and economic change in contemporary capitalism. Focusing on the Brazilian context, this paper considers the extent to which recent changes in housing regulations, policies and markets confirm or challenge narratives about the financialization of housing in the international academic debate. I argue that while many of the trends stressed in the literature are apparent, more extreme processes of financialization within the Brazilian housing sector remain limited not only because of institutional and regulatory constraints, path dependence or political resistance, but because of fundamental structural conditions of Brazil's position as a peripheral economy. Three different but mutually reinforcing processes are scrutinized in order to evaluate how the financialization of housing and its limits manifest in Brazil: the re-regulation of the real estate-financial sector initiated in the 1990s; the changing funding patterns among real estate companies since the mid 2000s; and the increasing commodification of housing induced by a large scale and heavily subsidized housing program launched in 2009.

In today context Mergers and Acquisitions has become important part of corporate world. This is mainly used for restructuring the business. In India it is first time started by government bodies then some leading financial institutions also took the necessary initiative to restructure to corporate sectors of emerging India by using the process of mergers and Acquisition. In the study impact of M&As on shareholder wealth in Indian companies in short run investment. For this I have assessed top 10 (Value wise) M&As of Indian Companies. For which I have examined the market return and script return of the company and stock price pre and post M&As by regression line. Similarly the changes in closing price of the script and compare it with Indices value (BSE 500). I have considered x as an Independent variable i.e BSE500 and Y as depended variable as Script price of the Indian companies. By these two variables it is found that in Pre & Post M&As how show its impact on shareholders wealth. ANNOVA and paired of t-test also have been used to measuring the signification of returns

There are two dominant corporate governance models in the world; the shareholder value model and the stakeholder value model. The shareholder model recognises shareholders as the owners of the company and focuses on accumulation of their wealth as a primary objective. In contrary, the stakeholder model concerns those affected by companies’ actions and promotes sustainability and inclusion. Anglo-American countries adopted the shareholder model whilst Continental Europe and Asian countries follow the stakeholder model. However, due to a number of corporate scandals and recurring issues within the corporate governance system, the UK government decided to reconsider companies’ objectives through reforms. This article seeks to answer whether those reforms improved the current system or whether it requires further changes.