Bowing to shareholder pressure can be costly

There is a fascinating piece in the latest issue of The Atlantic magazine called ‘Stop spoiling the shareholders’.

Contrary to conventional wisdom, it found companies that had a very accommodating approach to shareholders’ concerns have a poor track record in delivering long-term shareholder value.

In fact, companies that have a culture of putting shareholder value at the top of its priorities have limited upside potential. Or, as the piece states quite bluntly, “big banks that emphasise return to shareholders above all else have been shown to be menaces to society.”