How ‘Maximizing Shareholder Value’ Re-Emerged As ‘Value Creation’

When, on August 19, 2019, several hundred CEOs of major corporations signed the Business Round Table declaration that the fifty-year commitment to ‘maximizing shareholder value’ was no longer the goal of big business and that these firms shared ‘a fundamental commitment to all our stakeholders,’ many wondered what, if any, corporate behavior would change. The answer is becoming clear: not much.

Instead, ‘maximizing shareholder value’ has re-emerged in big-business with an impressive-sounding new label: ‘value creation.’ For example, in an article entitled, “The Value of Value Creation”, McKinsey consultants Marc Goedhart and Tim Koller contend  that firms enhancing shareholder value should be seen as heroic value creators acting for the good of society. In effect, in big business, greed is still good. And it has a superficially-attractive new name that makes a mockery real value creation.

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