Challenging the Goal of Shareholder Value Maximization in Sustainable Business Education

• Main Author: Sayre, Todd L.
• Format: text
• Published: Archīum Ateneo 2024
• Subjects: sustainability education; corporate governance; equity pay
• Online Access: https://archium.ateneo.edu/jmgs/vol12/iss1/5; https://archium.ateneo.edu/context/jmgs/article/1227/viewcontent/JMGS_2012.1_20__20Sayre_20__20Challenging_20the_20Goal_20of_20Shareholder_20Value_20Maximization_20in_20Sustainable_20Business_20Education_20__20FOR_20POSTING_20v3.pdf
• Institution: Ateneo De Manila University

The purpose of this paper is to explain to business instructors how to reconcile the assumption that managers must maximize shareholder value (MSV) with the prospect of corporations helping to achieve global environmental sustainability. The paper explains that managers choose to MSV at a cost to the environment not due to legal obligations but because of their equity pay incentives. The paper, then, provides a sequence of simplified explanations for instructors to use in conveying this information to their students. The potential to change executive pay enables students to consider the possibility of corporations helping to achieve global sustainability.