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+ - SPAM: Shareholder value and agency theory at it's worst

Submitted by
yuhong
yuhong writes: "The worst thing to apply shareholder value and agency theory to is the healthcare and insurance industries. From the abstract of the paper "Shareholder Value and the Performance of a Large Nursing Home Chain" (bolds are mine to show the problems): "Shareholder value was pursued at Sun through three inter-linked strategies: (1) rapid growth through debt-financed mergers; (2) labor cost constraint through low nurse staffing levels; and (3) a model of corporate governance that views sanctions for fraud and poor quality as a cost of business." And that is just from reading the abstract!"
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Shareholder value and agency theory at it's worst

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