10 Ways to Create Shareholder Value.
By: Rappaport, Alfred,
Harvard Business Review,
September 2006, Vol. 84, Issue 9
Do not manage earnings or provide earnings guidance.
Make strategic decisions that maximize expected value, even at the expense of lowering near-term earnings.
Make acquisitions that maximize expected value, even at the expense of lowering near-term earnings.
Carry only assets that maximize value.
Return cash to shareholders when there are no credible value-creating opportunities to invest in the business.
Reward CEOs and other senior executives for delivering superior long-term returns.
Reward operating-unit executives for adding superior multiyear value.
Reward middle managers and frontline employees for delivering superior performance on the key value drivers that they influence directly.
Require senior executives to bear the risks of ownership just as shareholders do.
Provide investors with value-relevant information.