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Both words in "shareholder value" are deeply problematic. Who is the "shareholder"? The working person toiling away today and hopping to strike a contract with

Both words in "shareholder value" are deeply problematic. Who is the "shareholder"? The working person toiling away today and hopping to strike a contract with society (via insurance/pension investments) to have some support and protection during old age? Or the army of intermediaries helpfully "managing" his/her contract till there is nothing of it left? And what is "value", or rather "who's values"? Is that the same person as above? What does the average person thing of superior financial returns that are at explicitly at the expense of environment and society? Friedman, of "the business of business is profit" fame, is throwing a party at his grave: "Goddam Nobel-granting suckers: I never told them that this construct will never work if their society is run as if morally bankrupt and, of course, they would never admit it being so themselves."

gruez 5y ago
>Who is the "shareholder"? From wikipedia: A shareholder (also known as stockholder) is an individual or institution (including a corporation) that legally owns one or more shares of the share capital of a public or private corporation. >And what is "value" From wikipedia: The term "shareholder value", sometimes abbreviated to "SV",[1] can be used to refer to: * The market capitalization of a company; * The concept that the primary goal for a company is to increase the wealth of its shareholders (owners) by paying dividends and/or causing the stock price to increase (i.e. the Friedman doctrine introduced in 1970); * The more specific concept that planned actions by management and the returns to shareholders should outperform certain bench-marks such as the cost of capital concept. In essence, the idea that shareholders' money should be used to earn a higher return than they could earn themselves by investing in other assets having the same amount of risk. The term in this sense was introduced by Alfred Rappaport in 1986.[2] > or rather "who's values"? the word that came before it: "shareholder"
- streamofdigits 5y ago
  see above my clarification. parroting definitions that were questionable already back in 1970 will not get us to any agreeable future
rmah 5y ago
Who is the "shareholder"? The shareholders are the collective owners of the company. That is, the people/organizations who own a share of the company. Full stop. No one else is a shareholder. Neither the working person toiling away, nor the army of intermediaries are shareholders (unless they happen to also own stock). And value in the phrase "shareholder value" is economic value. I.e. money or that which can be measured using money. It's not personal fulfillment, social well-being, global health or anything else like that. At larger firms, shareholders typically contribute nothing to the management and operation of the firm. But concepts of ownership in the modern world do not hinge on labor contribution. Note, I'm not advocating what I wrote above, I'm just describing the state of the world as it is.
- streamofdigits 5y ago
  i think I was not clear (enough). not referring to random pay-day loan worker but people who own stocks through their pension or insurance schemes this group (which is quite material in the scheme of things) is only remotely linked to their shareholding role. with important repercusions on both i) how much strict economic value they derive and ii) whether that value is at all compatible with their other sets of values
  - rmah 5y ago
    There is no role for shareholders other than the simple fact that they (as a group) own the company. That's all it means. It means nothing else. There is zero obligation or expectation that they do anything but simply own.
    - streamofdigits 5y ago
      last time I checked the lack of obligation is not the same as a lack of option. owning equity in a company is THE option and there IS an expectation that any shareholder that is not disenfranchised by helpful intermediaries will be exercising it. everything the company does is under the control of shareholders. they have they option to fire the management and rewrite practically the entire rulebook of what the company does. now it should be pretty clear that a lot of shareholders (across the size spectrum) would not necessarily disagree with management choices that optimize short term financial returns but to assume that every shareholder has this moral stance is simply a falsehood and that is increasingly becoming clear.

gruez 5y ago

>Who is the "shareholder"? From wikipedia: A shareholder (also known as stockholder) is an individual or institution (including a corporation) that legally owns one or more shares of the share capital of a public or private corporation. >And what is "value" From wikipedia: The term "shareholder value", sometimes abbreviated to "SV",[1] can be used to refer to: * The market capitalization of a company; * The concept that the primary goal for a company is to increase the wealth of its shareholders (owners) by paying dividends and/or causing the stock price to increase (i.e. the Friedman doctrine introduced in 1970); * The more specific concept that planned actions by management and the returns to shareholders should outperform certain bench-marks such as the cost of capital concept. In essence, the idea that shareholders' money should be used to earn a higher return than they could earn themselves by investing in other assets having the same amount of risk. The term in this sense was introduced by Alfred Rappaport in 1986.[2] > or rather "who's values"? the word that came before it: "shareholder"

streamofdigits 5y ago
see above my clarification. parroting definitions that were questionable already back in 1970 will not get us to any agreeable future

rmah 5y ago

Who is the "shareholder"? The shareholders are the collective owners of the company. That is, the people/organizations who own a share of the company. Full stop. No one else is a shareholder. Neither the working person toiling away, nor the army of intermediaries are shareholders (unless they happen to also own stock). And value in the phrase "shareholder value" is economic value. I.e. money or that which can be measured using money. It's not personal fulfillment, social well-being, global health or anything else like that. At larger firms, shareholders typically contribute nothing to the management and operation of the firm. But concepts of ownership in the modern world do not hinge on labor contribution. Note, I'm not advocating what I wrote above, I'm just describing the state of the world as it is.

streamofdigits 5y ago
i think I was not clear (enough). not referring to random pay-day loan worker but people who own stocks through their pension or insurance schemes this group (which is quite material in the scheme of things) is only remotely linked to their shareholding role. with important repercusions on both i) how much strict economic value they derive and ii) whether that value is at all compatible with their other sets of values
- rmah 5y ago
  There is no role for shareholders other than the simple fact that they (as a group) own the company. That's all it means. It means nothing else. There is zero obligation or expectation that they do anything but simply own.
  - streamofdigits 5y ago
    last time I checked the lack of obligation is not the same as a lack of option. owning equity in a company is THE option and there IS an expectation that any shareholder that is not disenfranchised by helpful intermediaries will be exercising it. everything the company does is under the control of shareholders. they have they option to fire the management and rewrite practically the entire rulebook of what the company does. now it should be pretty clear that a lot of shareholders (across the size spectrum) would not necessarily disagree with management choices that optimize short term financial returns but to assume that every shareholder has this moral stance is simply a falsehood and that is increasingly becoming clear.