2007
DOI: 10.1093/icc/dtm030
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Abstract: During the 1980s and 1990s the argument that "maximizing shareholder value" results in superior economic performance came to dominate the corporate governance debates. This shareholder-value perspective represents an attempt to construct a theory of corporate governance that is consistent with the neoclassical theory of the market economy. I outline the rationale for the shareholder-value perspective, and show that, rooted in agency theory, it lacks a theory of innovative enterprise. To go beyond agency theory… Show more

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Cited by 113 publications
(81 citation statements)
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“…As I have argue at length elsewhere (Lazonick 2007c;2008, ch. 6), increases in stock prices can be driven by innovation, speculation, or redistribution.…”
Section: Innovation Speculation Redistributionmentioning
confidence: 84%
See 3 more Smart Citations
“…As I have argue at length elsewhere (Lazonick 2007c;2008, ch. 6), increases in stock prices can be driven by innovation, speculation, or redistribution.…”
Section: Innovation Speculation Redistributionmentioning
confidence: 84%
“…Yet, as I have shown elsewhere (Lazonick and O'Sullivan 2000;Lazonick 2007c), it is a perspective that fails to address the conditions under which business enterprises are in fact innovative. In particular, the ideology of "maximizing shareholder value" ignores the role of workers, communities, and governments in making investments in the innovation process without any guarantee of a return.…”
Section: For Whom Does America Compete?mentioning
confidence: 99%
See 2 more Smart Citations
“…Notions of "agency" -and the idea that shareholders were the only group whose interest should be maximized by a corporation -became fashionable and influential not only in the US, but more widely. In 1980 stock options accounted for 19% of CEO remuneration in large United States corporations but it had risen to about 49% by 2000 (Lazonick, 2007). Anecdotal evidence strongly suggests that it has continued to rise further since then.…”
Section: Not Identical Outcomesmentioning
confidence: 99%