The Shareholder Value Myth

CHAPTER 8Making Room for Shareholder Conscience

Once we abandon the artifice of viewing investors’ interests solely from the perspective of a hypothetical and unrealistic Platonic shareholder, and focus on the reality that human beings who own shares are to at least some degree universal investors, it becomes obvious that conventional shareholder value thinking can be a self-defeating investment strategy for many—if not all—people who happen to own stock. At the same time, the universal investor challenge to shareholder primacy has limits. The category of universal investor is still restricted to those who do in fact hold stocks, whether directly or through a pension or mutual fund.

Compared to the rest of the world, Americans have a great fondness ...