Maximizing shareholder‐value

Purpose The purpose of this paper is to examine the claim that the pursuit of maximum value (wealth) for shareholders optimises economic and social benefits for society as a whole. Design/methodology/approach Evidence cited in support of the claim and the methodology employed by its supporters are examined. Counter‐evidence from a wide range of disciplines, including accounting, economics, finance, and medical sociology, is considered. Findings The evidence does not support the claim. Bias and severe methodological flaws in its supporters' research is revealed. Considerable evidence of adverse consequences is identified. Originality/value This paper draws from an unusually wide range of disciplines to expose the fallacy and a number of powerful myths about the economic and social benefits of making maximizing shareholder value the primary aim of corporate governance.