Corporate governance, managerial strategies and shareholder wealth maximization: a study of large European companies

Abstract

Discusses the agency issues underlying corporate governance, refering to research on managerial attitudes/incentives for maximizing shareholder value and pressures to align the interests of directors and shareholders. Reports a survey of finance executives in 175 large firms in 7 EU countries to analyse their strategies and the influence of pressure groups on strategy choice. Shows that market leadership and increased operating margins are the most successful operating strategies; changing productive capacity, generating new/better products and buying business with complementary products are the best investment strategies; and a leveraged buyout is the most effective capital strategy to maximize shareholder returns. Adds that UK managers (like US managers) have a shorter term focus than other European managers, perhaps because their relationships with institutional investors are less close.

Citation

Dockey, E., Herbert, W.E. and Taylor, K. (2000), "Corporate governance, managerial strategies and shareholder wealth maximization: a study of large European companies", Managerial Finance, Vol. 26 No. 9, pp. 21-35. https://doi.org/10.1108/03074350010766855