On the Shareholder Wealth Maximization Objective of Corporate Governance: The Case of Leveraged Recapitalizations

1996 ◽  
Vol 22 (4) ◽  
pp. 53-70
Author(s):  
M. Mark Walker
Keyword(s):  
Corporate Governance ◽  
Shareholder Wealth ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization

Transnational Corporate Governance: The State of the Art and Twenty-First-Century Challenges

2021 ◽  
pp. 614-646
Author(s):  
Dionysia Katelouzou ◽  
Peer Zumbansen
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Shareholder Wealth ◽  
Performance Measure ◽  
The State ◽  
First Century ◽  
Access To Health Services ◽  
Wide Range ◽  
Shareholder Wealth Maximization ◽  
Twenty First Century

This chapter explores corporate governance as a transnational regulatory field. Mirroring the rise in importance of the idea of shareholder wealth maximization as a firm’s definitive performance measure, corporate governance became a hotly contested field of competing visions of firms’ institutional and normative infrastructure in search of creating the most advantageous conditions to attract capital in volatile markets. This shift occurred at the same time that regulatory transformations in Western postindustrial societies since the early 1980s had begun to significantly shift public service provision and state-organized frameworks for old-age security guarantees and access to health services. Today’s corporate governance laboratory is a transnational force field, fought over by a host of different state and nonstate actors and also by private actors such as institutional investors. Meanwhile, following the financial crises in 2001, 2008 and 2020 and the simultaneously growing pressure on corporations from human rights, gender equality, and environmental groups, the corporate governance debate again is shifting. This time, a diversity of issues are being discussed under the corporate governance rubric, indicating a more comprehensive engagement with the firm’s purpose and functions and its societal obligations and responsibilities. Given the crucial role of firms as the residual claimants of a wide-ranging retreat of the state from its role in guaranteeing and providing a wide range of social functions, corporate governance is a mirror for the transformation of public and private power, and it has to address the twenty-first-century challenges, including global value chains and the proliferation of institutional investors, unfolding on a planetary scale.

scholarly journals Shareholder Wealth Maximization Under Leveraged Buyouts

2011 ◽  
Vol 4 (2) ◽  
pp. 48
Author(s):  
William J. Bertin ◽  
Khalil M. Torabzadeh
Keyword(s):  
Shareholder Wealth ◽  
Leveraged Buyouts ◽  
Excess Returns ◽  
Leveraged Buyout ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization ◽  
The Impact

This paper examines the possible excess returns to stockholders arising from leveraged buyout transactions in an effort to determine whether or not such transactions are consistent with shareholder wealth maximization. In addition, the excess returns generated through leveraged buyouts are compared to those associated with typical, non-leveraged acquisitions. The implications of these comparisons are discussed with a special emphasis on the impact of leveraged buyouts upon investors wealth. The major finding of this study is that shareholder wealth is increased, but not necessarily maximized, under leveraged buyouts.

scholarly journals Could the impaired intention of ethical investment be recovered?

2016 ◽  
Vol 22 (5) ◽  
pp. 736-750 ◽  
Author(s):  
Chiung-Yao Huang ◽  
Yu-Cheng Lin ◽  
Chiung-Hui Chen
Keyword(s):  
Negative Impact ◽  
Shareholder Wealth ◽  
Moral Intensity ◽  
Ethical Investment ◽  
Remedial Measures ◽  
British Petroleum ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization ◽  
Classical Economic ◽  
Ethical Investments

AbstractThe environmental pollution caused by Advanced Semiconductor Engineering in October 2013 in Taiwan highlighted the fact that foreign investors tend to support the classical economic ideas of arbitrage and shareholder wealth maximization, which is in conflict with the fact that institutional investors in the current global capital market lean towards the stakeholder theory in ethical investments. Will local investors’ decision-making also be influenced by differences in the perceived ethics of negative environmental corporate social responsibility (ECSR)? Compared to the remedial measures implemented by British Petroleum for the 2010 Deepwater Horizon oil spill, Advanced Semiconductor Engineering, another international corporation, decided to not respond to any news regarding the toxic wastewater incident. In contrast, Advanced Semiconductor Engineering only made clearer promises after extreme public pressure. This study investigated whether remedial measures for negative ECSR are an important factor influencing investors’ decisions. The purpose is to clarify the interactions among perceived moral intensity of negative ECSR, the implementation of remedial measures, and the intention of ethical investment. An experimental design was employed to test the hypotheses. The results indicated that perceived moral intensity has a significant negative impact on the intention of ethical investment. The implementation of remedial measures for negative ECSR affects investors’ intent to invest. Finally, positive ECSR remedial measures also serve as a key moderating variable in the relationship between perceived moral intensity and the intention of ethical investment. This study clarified whether the provision of remedial mechanisms can effectively recover or maintain investor investment intent when companies experience negative ECSR.

Beyond Shareholder Wealth Maximization

1974 ◽  
Vol 3 (4) ◽  
pp. 25 ◽  
Author(s):  
M. Chapman Findlay ◽  
G. A. Whitmore
Keyword(s):  
Shareholder Wealth ◽  
Wealth Maximization ◽  
Shareholder Wealth Maximization

Stakeholder Happiness Enhancement: A Neo-Utilitarian Objective for the Modern Corporation

2013 ◽  
Vol 23 (3) ◽  
pp. 349-379 ◽  
Author(s):  
Thomas M. Jones ◽  
Will Felps
Keyword(s):  
Social Welfare ◽  
Shareholder Wealth ◽  
Wealth Maximization ◽  
Stakeholder Interests ◽  
Modern Corporation ◽  
Corporate Objective ◽  
Sequential Logic ◽  
Shareholder Wealth Maximization ◽  
Specific Alternative ◽  
Refined Version

ABSTRACT:Employing utilitarian criteria, Jones and Felps, in “Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique” (Business Ethics Quarterly 23[2]: 207–38), examined the sequential logic leading from shareholder wealth maximization to maximal social welfare and uncovered several serious empirical and conceptual shortcomings. After rendering shareholder wealth maximization seriously compromised as an objective for corporate operations, they provided a set of criteria regarding what a replacement corporate objective would look like, but do not offer a specific alternative. In this article, we draw on neo-utilitarian thought to advance a refined version of normative stakeholder theory that we believe addresses a major remaining criticism of extant versions, their lack of specificity. More particularly, we provide a single-valued objective function for the corporation—stakeholder happiness enhancement—that would allow managers to make principled choices between/among policy options when stakeholder interests conflict.

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