Jack Welch: the influential former GE chief has said that shareholder value is a result, not a strategy
Shareholder value
Of all the 50 ideas profiled in this publication, shareholder value enjoys a particular distinction. Jack Welch, former chief executive of General Electric and one-time champion of shareholder value, called it “the dumbest idea in the world”.
Yet it has been one of the most influential – and looks likely to remain so. Shareholder value originally rose to prominence to solve what Adam Smith, the Scottish economist, called the “agency problem” – that managers of a company might follow a course which was detrimental to the company’s ...
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