“Maximizing shareholder value” is stupid and dangerous

Roger L. Martin, from his book Fixing the Game

Our theories of shareholder value maximization and stock-based compensation have the ability to destroy our economy and rot out the core of American capitalism. These theories underpin regulatory fixes instituted after each market bubble and crash. Because the fixes begin from the wrong premise, they will be ineffectual; until we change the theories, future crashes are inevitable.

This is via Steve Denning’s article in Forbes summarizing Martin’s book. An excellent read that touches one of the major problems in corporate America today.

Am I doing it wrong?

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