The creation of shareholder value and the performance of listed companies: What intersections of theoretical paradigms?

Abstract

This theoretical article studies the conception of the creation of shareholder value and the performance of listed companies under a financial and contractual paradigm. It aims to cross the different contractual, financial and cognitive theories in order to analyze the notion of the creation of shareholder value. The latter is a fundamental and unavoidable factor in listed companies. Shareholder value is considered one of the main objectives to be achieved by managers in an environment characterized by strong pressure from the financial markets and from shareholders. This theoretical intersection brings out a set of paradigms that implicitly and explicitly lift the veil on the concept of shareholder value and its link with the performance of listed companies. These include the financial theory of the firm, which dissects the creation of shareholder value from a financial and accounting perspective. This rich financial approach but which remains incomplete to encircle the notion of shareholder value in its entirety. Indeed, the incompleteness of financial theory lies in the fact that it does not integrate the organizational and managerial aspect into its general conception. However, these factors make it possible to analyze the concept of shareholder value from another angle that interests the majority of theoretical and empirical studies. To this end, the mobilization of contractual theories is considered an essential step which is part of the clarification of shareholder value and business performance while integrating internal or external mechanisms related to the management of organizations. Moreover, and despite the richness of contractual theories, the cognitive paradigm is essential in order to carry out an exhaustive analysis of the creation of shareholder value.