Essay on Maximizing Shareholder Value in Corporate Governance

This essay examines the concept of maximizing shareholder value within the framework of corporate governance. It explores how shareholder value is created through various business processes, including revenue generation, supplier relationships, and cost management, and how these elements contribute to overall financial performance. The essay discusses the significance of economic profit and the role of metrics like earnings per share in evaluating value creation. Furthermore, it critiques the dominance of shareholder value as a principle of corporate governance, considering its impact on brand loyalty, customer satisfaction, and the importance of quality standards. The essay also references several scholarly sources to support its arguments, providing a comprehensive analysis of the topic.

Running head: MANAGEMENT
Critical management in global context
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Introduction
Stakeholders and shareholders occupy important position in a business. The personnel
intend to generate value for the shareholders through maximizing the investment returns.
Corporate governance is followed in this process for implementing the maximization options
according to the requirements. The aim of this segment is to assess maximizing shareholder
value as an integral component of the corporate governance.
Discussion
3. Discuss the consequences of maximizing shareholder value and critique whether this
should be the dominant principle of corporate governance?
Shareholder value creation is one of an important component of the corporate
governance. This value creation occupies the central position in the business operations. The
important parameters of value creation are revenue, suppliers and manufacturers, taxes,
interest expenses and net income (Chen and Feldman 2018). Standardizing the quality of
these aspects generates inclusive practices, which enhances the cultural diversity. Along with
this, the approach enhances the stability in the relation with the clients and customers.
Economic profit is one of the main sources of maximizing shareholder returns. However,
Patterson et al. (2018) is of the view that ensuring the wellbeing of the customers through the
provision of quality products and services is effective in terms of maintaining the market
position in the competitive ambience. Identifying the metrics is one of the ways in which
value creation can be fulfilled. Within this, Stanley and Wasilewski (2017) mentions about
earnings per share, which is an integral component and process of governing the process of
value creation.
Conclusion
Maximizing shareholder returns enhance the brand loyalty, as the clients and the
customers get more options for exercising the purchasing decisions and power. This process

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is effective, as it reflects the consciousness towards the wellbeing of the customers. Quality is
one of an integral aspect in the corporate governance, which provides higher competitive
advantage to the companies. Using the metrics for evaluation is assistance in terms of
detecting the areas in which modification is to be made for upgrading the standards and
quality of the performance.

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References
Chen, S. and Feldman, E.R., 2018. Activist‐impelled divestitures and shareholder
value. Strategic Management Journal, 39(10), pp.2726-2744.
Stanley, D. and Wasilewski, N., 2017. Strategic revenue management: Revenue stability and
maximizing shareholder value. In Competition Forum (Vol. 15, No. 1, pp. 141-145).
American Society for Competitiveness.