Publications
Managing for Shareholder Value – International survey 2001
International research from PA Consulting Group shows that virtually all (90.8%) senior executives worldwide agree, or strongly agree, with the idea of 'Managing for Shareholder Value' (MSV) as a management philosophy. Yet only around 20% of companies interviewed by PA are fully committed to such an approach, and only around two-thirds have even partial commitment.
To test the hypothesis that 'virtually all companies are today managing for shareholder value', PA completed a survey of approximately 700 senior executives from the world's leading companies. Two out of three (63%) top executives claim to be broadly in favor of Managing for Shareholder Value in principle, but only half (51%) say they are following through in the actions they take in their business. This is surprising, given the demonstrable benefits from such an approach.
PA's research demonstrates that the benefits from adopting MSV are large – over the lifetime of the average shareholding (eight years), MSV companies outperform those hostile to the idea by more than 100%. The report shows that £1 million invested over eight years in a company which fully manages for shareholder value would compound to a value of £5.5 million, over twice as much as a company that disagrees with the MSV principles (£2.6 million).
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