Shareholder Value Maximization

Shareholder Value Maximization is the principle that a company's primary goal should be to increase the financial return for its shareholders, who are the individuals or institutions owning shares in the company. This approach focuses on enhancing stock prices and overall profitability, often prioritizing business decisions that lead to higher dividends or capital gains. While it aims to reward investors, critics argue it can lead to short-term thinking, potentially neglecting other stakeholders, such as employees, customers, and the community, thereby raising questions about the broader impact of corporate actions.