The Endurance of Shareholder Value Maximization as the Preferred Corporate Objective

Andrew Inkpen*, Anant K. Sundaram

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


Sundaram and Inkpen (2004a, 2004b) proposed shareholder value maximization (SVM) as the preferred corporate objective since it alone impels the firm to implement strategies that enhance outcomes for all stakeholders. Goranova and Ryan (2021) argue that three recent developments – common ownership, decoupling of owners from managers, and greater divergence in shareholder interests – call into question our SVM view. We dispute their arguments: (i) The developments they cite are overplayed in the literature, and may not matter much for SVM; (ii) To the extent they do matter, their concern is less about SVM’s relevance as corporate objective but more whether these developments bias decisions towards the short-term. We do not disagree since, after all, Sundaram and Inkpen (2004a) is solely about SVM for the long-term; (iii) If anything, Goranova and Ryan’s (2021) proposed solution of ‘strategic corporate governance’ can be viewed as an endorsement of the relevance and enduring primacy of SVM for the long-term.

Original languageEnglish
JournalJournal of Management Studies
Issue number2
Pages (from-to)555-568
Number of pages14
Publication statusPublished - Mar 2022
Externally publishedYes


  • Corporate governance
  • Corporate objective
  • Shareholder value maximization
  • Stakeholders

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