The Coming Transformation of Shareholder Value

Simon Deakin

Corporate Governance: An International Review, 2005, vol. 13, issue 1, 11-18

Abstract: This essay challenges the primacy of shareholder value. Shareholder primacy originates not in company law, but rather in the norms and practices surrounding the rise of the hostile takeover movement in Britain and America in the 1970s and 1980s. It is less strongly institutionalised than might be supposed, because it is essentially a cultural rather than a legal point of reference. Moreover, in the course of the past decade, a shift in the content of shareholder value has occurred which reflects the stakeholder critique of that period: this reflects the idea that shareholders should exercise their power not as representatives of the market, but as agents of society as a whole. The corporate governance of the future will be centrally concerned with how this idea is worked out in practice.

Date: 2005
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