Would all those chief executives who do not want to create value for their shareholders please raise their hands. Nobody? I'm glad we could agree on something.
But from here on, the consensus breaks down. As the letters section of this newspaper has revealed during the past couple of weeks, the apparently simple label of “shareholder value” is understood and interpreted in a surprisingly varied number of ways. No wonder this debate gets heated, and confused.
There is no shame in being unclear. Some of our most distinguished business leaders are equally confused. Jack Welch, the former General Electric boss, may have launched this debate when he called shareholder value “the dumbest idea in the world” last April. But less than a year earlier he had chastised Jeff Immelt, his successor, for failing to respect the discipline this dumb idea demands. He said he would “get a gun out and shoot him” if GE did not hit profit forecasts. “Just deliver the earnings,” he said. “Tell them you're going to grow 12 per cent and deliver 12 per cent.” Like the guy said: dumb.