Rethinking Corporate Success: A Critical Review of Shareholder Value as a Driver of Corporate Financial Sustainability
DOI:
https://doi.org/10.54536/ajbmi.v1i1.6830Keywords:
Corporate Financial Sustainability, Corporate Success, ESG, Shareholder Value, Stakeholder GovernanceAbstract
This critical literature review challenges the prevailing assumption that shareholder value maximization is sufficient to ensure corporate financial sustainability (CFS). Drawing on 25 peer-reviewed articles from the Web of Science (WoS) database, we synthesize theoretical and empirical perspectives to reveal fundamental tensions between short-term financial returns and the imperatives of resilience, multi-stakeholder accountability, and ESG integration. While Agency theory has historically anchored shareholder primacy, we highlight how Stakeholder theory, the Resource-based view, and Institutional theory expose its conceptual and operational limitations. Key gaps include conflating market valuation with genuine value creation, inadequate measurement approaches, and insufficient attention to emerging-market dynamics. In response, we propose an integrative governance framework structured around four pillars: (1) long-horizon performance orientation, (2) ESG-driven resource capabilities, (3) stakeholder-inclusive governance, and (4) systemic risk resilience. This framework repositions corporate governance as the central mechanism for shifting from narrow value extraction to CFS value creation. We conclude that a narrowly defined shareholder-value approach undermines CFS; instead, a holistic, governance-led approach is essential for corporate endurance and societal well-being in an increasingly complex global landscape.
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