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‘Shareholder Value’ for Private Companies

Gregory V. Milano, the co-founder and chief executive officer of Fortuna Advisors LLC, a value-based strategic advisory firm provides what is to me a very balanced look at Shareholder Value. http://ww2.cfo.com/growth-strategies/2016/08/shareholder-value-private-companies/ How well do you think he has made his argument?

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Not quite a strong one (but not a weak one either)...

Aside from my response to the "maximization of shareholder value" side question in a previous thread ( https://www.proformative.com/questions/companies-don-t-need-cfos-be-cpas-anymore ), I would add these...

1. Shareholder value is a result, NOT a goal.
2. Shareholder value is a LAGGING indicator/result.
3. STAKEholder initiatives have more to do with increasing shareholder value in the long term than just concentrating on "shareholder value" in the near term.
4. I did NOT see the words....SUSTAINABLE COMPANY, which I think should be emphasized.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Here is a recent (Aug 7, 2016) LinkedIn Pulse posting that echoes my views. I think Mr. Barnett explained/elucidated it better than I can....

https://www.linkedin.com/pulse/shareholder-v-stakeholder-false-dichotomy-paul-barnett?trk=hp-feed-article-title-like

"For a business to create sustainable value it depends on the support of stakeholders."

"So, to summarise, Valueism is about the co-creation of value by people and organisations (stakeholders), to enhance individual and collective prosperity in a way that aligns the interests of business and society. And, it sees no conflict between the interests of shareholders and stakeholders since the only sustainable way to create value is by also satisfying the needs of stakeholders, upon whom the fortunes of the business depend. It, therefore, rejects the false dichotomy that is the idea business must either operate to benefit stakeholders or shareholders, but cannot serve both."

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

There is however ONE unintended negative consequence or outcome i can foresee.... TOO BIG TO FAIL!

I will use Amazon as an example....if Amazon keeps doing what it has been doing (say for another 15-20 years), there will come a time that it will be too big. How big is too big? I don't have the answer.

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