The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public

Lynn Stout examines the problems with shareholder value thinking and explores alternative models for defining corporate purpose. She challenges the widely repeated claim that corporate law requires executives to maximize shareholder value, arguing this belief is a myth. According to Stout, prioritizing shareholder value encourages managers to focus on short-term earnings at the expense of long-term strategy, discourages investment and innovation, and harms employees, customers, and communities. She contends this approach can lead companies toward reckless and irresponsible behavior. The book presents alternative corporate purpose models designed to better serve the interests of investors, corporations, and society as a whole.