The Shareholder Value Myth

The Shareholder Value Myth: How putting shareholders first harms investors, corporations, and the public

by Lynn Stout

Business schools and law schools teach that the purpose of a corporation is to maximize shareholder wealth. “Shareholder wealth, in turn, is typically measured by share price—meaning share price today, not share price next year or next decade.” Lynn Stout (1957-2018), who was a business law professor at Cornell, makes the case that this is both untrue and harmful.

“United States corporate law does not, and never has, required directors of public corporations to maximize either share price or shareholder wealth… State statutes similarly refuse to mandate shareholder primacy… As long as boards do not use their power to enrich themselves, the [business judgment rule] gives them a wide range of discretion to run public corporations with other goals in mind, including growing the firm, creating quality products, protecting employees, and serving the public interest. Chasing shareholder value is a managerial choice, not a legal requirement.”

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The Soft Edge: Where Great Companies Create Lasting Success

The Soft Edge: Where Great Companies Create Lasting Success

by Rich Karlgaard

It is noteworthy that a prominent business journalist from Silicon Valley—where technology and IPOs dominate headlines—wrote a book about the human factors of business success. “The yin and yang of effective management has always been about the search for the right spot between data truth and human truth.”

“Hard-edge execution is all about managing exactly to the numbers. The people who live on the hard edge of business are good at making the trains run on time. They focus on profit. Their language is time, money, and numbers. Every company in the world needs these employees.”

“Soft-edge excellence—in trust, smarts, teams, taste, and story—tends to attract loyal customers and committed employees.” Karlgaard says the soft edge is “the heart and soul” of your company. Continue reading “The Soft Edge: Where Great Companies Create Lasting Success”

Nolo’s Quick LLC

Nolo’s Quick LLC: All You Need to Know About Limited Liability Companies

by Anthony Mancuso

“The limited liability company (LLC) is a relatively new business ownership structure that combines the best features of the corporation and the partnership. It gives small business owners corporate-style protection from personal liability while retaining the pass-through income tax treatment enjoyed by sole proprietorships (the legal term for one-person businesses) and partnerships.” LLC owners are called members.

To determine if an LLC is the best fit for your business, the author explains the advantages and disadvantages of various business structures in comparison to LLCs, including sole proprietorship, general partnership, limited partnership, C corporation, S corporation, RLLP, Series LLP, L3C, and benefit corporations. Continue reading “Nolo’s Quick LLC”

How: Why How We Do Anything Means Everything…in Business (and in Life)

how

How: Why How We Do Anything Means Everything…in Business (and in Life)

by Dov Seidman

The book is about ethics and reputation, value-based cultures vs. rule-based cultures, and as the author likes to say, “getting your hows right.” There are some valuable messages in the book. Continue reading “How: Why How We Do Anything Means Everything…in Business (and in Life)”