Business Ethics and Corporate Governance, Second Edition

LONG-TERM SHAREHOLDER VALUE

There is a global consensus about the objective of ‘good’ corporate governance: maximizing long-term shareholder value. It is useful to limit the claimants to shareholders for three reasons:

1. In most of the countries, generally labour laws are strong enough to protect the interests of workers in the organized sector, and employees as well as trade unions are well aware of their legal rights. In contrast, there is very little in terms of the implementation of the law and of corporate practices that protects the rights of creditors and shareholders.
2. There is much to recommend in law, procedures and practices to make companies more attuned to the need for servicing properly debt and equity.
3. Managers have to look after ...