The New Corporate Governance

Arbeitspapier

In the last few years, there has been a dramatic increase in shareholder engagement on environmental and social issues. In some cases shareholders are pushing companies to take actions that may reduce market value. It is hard to understand this behavior using the dominant corporate governance paradigm based on shareholder value maximization. We explain how jurisprudence has sustained this criterion in spite of its economic weaknesses. To overcome these weaknesses we propose the criterion of shareholder welfare maximization and argue that it can better explain observed behavior. Finally, we outline how shareholder welfare maximization can be implemented in practice.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: New Working Paper Series ; No. 317

Classification and Topics

• Classification: Wirtschaft ; Business Objectives of the Firm ; Business and Securities Law
• Subject: Shareholder Value ; Shareholder Welfare ; Proxy Voting

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hart, Oliver D. ; Zingales, Luigi
• Event: Veröffentlichung
• (who): University of Chicago Booth School of Business, Stigler Center for the Study of the Economy and the State
• (where): Chicago, IL
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/262719
• Last update: 10.03.2025, 11:41 AM CET