The shareholder value mythology and the market "communion"
The shareholder value mythology and the market "communion"
Nihel Chabrak
Since the 1970s, the shareholder value maximization doctrine (SVMD) has stood as the prominent corporate governance model for its alleged benefits to the economy as a whole. Developed by Chicago School economists, endorsed by institutional investors and disseminated by the means of an ideological apparatus, the SVMD is portrayed to having also contributed to the dissemination of the financialisation of management and organisations and to the reign of the market conception of the firm. Using an analytical framework borrowed from Gurvitch's sociology of law, I argue that market advocates are bonded through a form of sociality called a "communion". This grouping aims to institute financial markets as the infallible and legitimate guide for any human affairs. Despite its "intellectual fallacy", the mythology of SVM is depicted to serve as means to maintain the collective intuition of the market communion and mediation and communication between its members.
Law and Financial Markets Review, Vol. 8, No. 1, Feb 2014: 27-38.