In search of an alternative to shareholder value maximization

Gaël Giraud and Cécile Renouard ()
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Cécile Renouard: ESSEC Business School

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper argues that mainstream economic theory, far from providing an indisputable plea in favor of shareholder value-maximization, offers striking arguments showing quite the opposite : profit-maximization cannot be a legitimate goal for private firms. This opens the door for a widening of a company's goal. We argue that it should include the concern of all the stakeholders of a company, and cannot be adequately addressed uniquely by Pigouvian taxes or by property rights. Coming to terms with this broad understanding of a company's goal should imply the internalization of the stakeholders' concern within the legal structure of the firm -- as in the case of the SCIC in France or the CIC in the UK.

Keywords: Corporate social responsibility; shareholder value; stakeholder value; incomplete markets; limited liability; property rights; collateral; cooperative.; Responsabilité sociale de l'entreprise; valeur actionnariale; marchés incomplets; externalités; responsabilité limitée; parties prenantes; droits de propriété; coopératives. (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-cfn
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00611712v1
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Published in 2011

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Related works:
Working Paper: In search of an alternative to shareholder value maximization (2011)
Working Paper: In search of an alternative to shareholder value maximization (2011)
Working Paper: In search of an alternative to shareholder value maximization (2011)
Working Paper: In search of an alternative to shareholder value maximization (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00611712

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