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2 of 3 people found the following review helpful
There is a very strong body of analysis that shows that the thinking about shareholder value and ownership is screwing up the modern economy. Clearly, shareholders have important rights and good shareholders deserve good returns. The problem is when the theory gets loaded with ideology and the ideology is actually antibusiness and bad for the economy. This is an important book because it provides a rigorous legal foundation freeing up the mind and in this new space and understanding of what is appropriate begins to emerge.
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1 of 2 people found the following review helpful
on 14 May 2013
Nicely written book that successfully doubts the authority of the shareholder value doctrine in corporate governance law. It is a worth reading book especially if you consider its low price. Enjoy it!!
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1 of 3 people found the following review helpful
on 23 May 2014
One well known approach to investing is based on looking for quoted companies where the share price under-estimates the inherent, underlying value of the firm in terms of net assets, profits and cash flows. By buying low and being prepared to wait until the market catches up with the true valuation, the investor can then sell at a profit.

This makes it clear that there is scope for a big difference between today's share price and the price that may be achieved over the longer term.

This book is caricaturing shareholder value thinking as focused on the short term share price. That bothers me because it risks throwing the baby away with the bath water.

It confuses issues to do with stock market valuations and bubbles, governance and management incentives with long term planning for the future prosperity of the firm.

The book talks a great deal about legal issues but it's the law of the USA. This inevitably means that in any other legal jurisdiction, what it says is unreliable and may be wrong.

Firms make mistakes. BP (with the decisions around the Deepwater Horizon oil platform in the Gulf of Mexico, Union Carbide with the terrible events at Bhopal, Enron etc. It's hard to see that these were done to improve shareholder value and if they were, the people involved got it badly wrong.

If there aren't obligations to consider other stakeholders, there should be. Each imposes constraints on viable actions. There is a genuine economic issue where society picks up costs when they are outside of the benefit of transactions. The classic example is pollution that is responsible for climate change. Those costs need to be passed back to the decision makers.

The book presents an academic argument against a very short-termist approach to shareholder value in terms of the current share price. I accept that such an idea is deeply flawed but that shouldn't be a surprise to anyone.

I suggest that you go back to some of the original work on shareholder value.
Creating Shareholder Value: The New Standard for Business Performance by Alfred Rappaport and his follow up Saving Capitalism From Short-Termism: How to Build Long-Term Value and Take Back Our Financial Future
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0 of 1 people found the following review helpful
on 21 March 2013
I am using this book for research for my own dissertation topic, and feel it provides a solid foundation for the shareholder value argument. It is interesting and engaging.
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0 of 1 people found the following review helpful
on 25 February 2014
Informative, insightful and compelling logic - this book should be a 'must read' on all business and management curricula; easily accessible to the lay-person, too
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