Defining Key Factors to Sustain Maximum Shareholder Value

Bistrova, Julia; Lāce, Nataļja

doi:10.5171/2012.391928

Cited by 7 publications

(8 citation statements)

References 11 publications

(8 reference statements)

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“…Finally, an all-embracing proposition on the shareholder value and its sustainability is offered by Bistrova and Lace [4], who have developed a hypothetical model of shareholder value measurement. Based on a content analysis of the academic literature, the authors proposed that the shareholder value and its sustainability is created and measured by (1) profitability, (2) capital budgeting, which directly influences the cost of a company's capital, (3) accountability and ethics of the management, (4) quality of corporate governance, and (5) the company's innovation capacity.…”

Section: The Evolution Of the Shareholder Value Conceptmentioning

confidence: 99%

“…While initially the shareholder value mainly described short-term profit orientation, nowadays the concept increasingly leans towards reflecting the need to act responsibly and sustainably for the organization to ensure its place in the economy in the long term. More and more focus is put on long-term value preservation for the shareholders and sustainability [4].…”

Section: Introductionmentioning

confidence: 99%

“…First, 65 academic articles were included in the qualitative content analysis, yielding 183 units of analysis divided into 12 categories. Next, to examine whether, with a tendency of the market to move towards higher sustainability and long-term orientation, there was a shift in companies' mission statements, the results of a content analysis of 70 Central and Eastern European (CEE) companies' mission statements performed by Bistrova and Lace in 2012 [4] were compared to the 2021 data of the same companies.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

ESG Importance for Long-Term Shareholder Value Creation: Literature vs. Practice

Zumente

Bistrova

2021

Journal of Open Innovation: Technology, Market, and Complexity

133

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This article aims to detect how ESG adds value to the long-term shareholder value creation and to discover whether businesses are aware of positive ESG effects and, therefore, whether they will become more ESG-conscious. By conducting a qualitative content analysis on the academic literature, this article firstly aims to determine if shareholders’ value is positively affected by corporate ESG awareness. Secondly, to test whether companies are becoming more conscious about the importance of ESG, the mission statements of publicly listed Central and Eastern European (CEE) companies are compared to their decade-old versions. This analysis allows us to conclude on whether companies have shifted their attention to the ESG factors as a part of their purpose of existence and, therefore, for long-term shareholder value creation, which is one of the main goals of the exchange-listed enterprises. The content analysis results show that companies with higher sustainability awareness ensure shareholder value creation via improved financial performance, management quality as well as reduced risk metrics. Additionally, qualitative nonfinancial factors such as reputation, stakeholder trust, employee satisfaction and engagement provide an even more significant effect on the long-term value than the pure financial matters. The theoretical trend is found to be supported by the fact that sustainability practice and consumer-oriented keywords dominate the mission statements of CEE companies, while keywords related to shareholders and profit experienced the most significant decrease from 2012 to 2021. The present research is unique as it looks at how companies tend to become more ESG aware, integrating the sustainability perspective into their mission statements in response to the global sustainability trend.

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Section: The Evolution Of the Shareholder Value Conceptmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

ESG Importance for Long-Term Shareholder Value Creation: Literature vs. Practice

Zumente

Bistrova

2021

Journal of Open Innovation: Technology, Market, and Complexity

133

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“…Given the rise of several theories to support companies' mission statements-shareholder theory and stakeholder theory-Zumente and Bistrova [1] suggest that shareholder value creation should be supported by putting more attention in a long-term orientation instead of a short-term one. Hence, the company should be concerned about its actions in the long term in order to assure its presence in the economy, thus acting in a more sustainable and responsible way [25]. Here arise two keywords: "corporate social responsibility" (CSR) and "sustainability".…”

Section: Shareholder Value Creationmentioning

confidence: 99%

Effect of Computer Assisted Audit Tools on Corporate Sustainability

Samagaio

Diogo

2022

Sustainability

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The literature is fertile in studies that examine the determinants of internal and external auditors’ adoption of computer-assisted audit tools and techniques (CAATs), often ignoring their practical effects on audit quality and organizational performance. This study provides novel evidence on the type of CAATs used by internal auditors, tests the effect of their adoption on corporate sustainability, and explores the moderating effect of organizational characteristics. In this paper, we used data from Portuguese internal auditors collected through a survey, whose research hypotheses were analyzed by the partial least squares–structural equation modeling technique. We found that internal auditors use CAATs moderately in the exercise of their tasks. The results of our study show that there is a strong and positive effect of the use of CAATs by internal auditors on fraud detection in the purchase-to-pay business process, and that the intensity of this relationship is not influenced by the type and size of the entity. This study complements previous research and provides support to practitioners’ decisions that can boost the use of CAATs in internal auditing to make organizations more sustainable.

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“…Thus, shareholder value is associated with long-term value and is not narrowly interpreted as maximizing annual profits by ignoring the sustainability of shareholder value. From a sustainability perspective, companies' efforts to maximize shareholder value should not harm other stakeholders through reducing investments in research and development, compromising employee safety, cutting expenses for technology development to reduce environmental impact (Bistrova and Lace, 2012; Bistrova et al , 2014) or managing the accounting data (Chan et al , 2006).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Does mandatory CSR provide long-term benefits to shareholders?

Juniarti

2020

SRJ

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Purpose Mandatory corporate social responsibility (CSR) aims to protect the long-term benefit of shareholders; therefore, this study aims to seek empirical evidence for the benefit of mandatory CSR from the perspective of shareholders. Design/methodology/approach Consistent with the objective of this study, the long-term shareholder benefit is measured using the sustainability perspective. Companies listed on the Indonesia Stock Exchange that have at least five years of CSR implementation, as its mandate and have retroactive earnings data for minimum six years before the observation year are selected as the study’s sample. Findings The findings support that mandated CSR protects long-term shareholder value; there is a significant association between CSR and sustainable shareholder value. Industry profiles are an essential aspect of the association model. The results are robust through testing the association for various scenarios of time. Research limitations/implications This study uses a single measurement of shareholder value based only on accounting measurement. Further, due to limitations in accessing internal company data, this study relies on annual reporting information to measure CSR implementation. Originality/value This study is the first to provide empirical evidence of the long-term benefit of mandatory CSR from the shareholders' perspective. This study also contributes to the existing literature by evaluating the success of mandatory CSR in developing countries. Those that successfully implemented mandatory CSR can serve as a model for other developing countries interested in creating similar policies to encourage socially responsible companies.

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Defining Key Factors to Sustain Maximum Shareholder Value

Cited by 7 publications

References 11 publications

ESG Importance for Long-Term Shareholder Value Creation: Literature vs. Practice

ESG Importance for Long-Term Shareholder Value Creation: Literature vs. Practice

Effect of Computer Assisted Audit Tools on Corporate Sustainability

Does mandatory CSR provide long-term benefits to shareholders?

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