Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/262719 
Year of Publication: 
2022
Series/Report no.: 
New Working Paper Series No. 317
Publisher: 
University of Chicago Booth School of Business, Stigler Center for the Study of the Economy and the State, Chicago, IL
Abstract: 
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.
Subjects: 
Shareholder Value
Shareholder Welfare
Proxy Voting
JEL: 
G3
L21
K22
Document Type: 
Working Paper

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