Christensen: CEOs should not maximize shareholder value

Clayton Christensen: “Their time horizon is shorter than even that of even the shortest-term managers. So I don’t think it’s right to think of [these investors] as shareholders of your company. They’re investors who temporarily own securities in your company at a particular point in time. They’re responsible for maximizing the stock value of their investments. You as the CEO are responsible for maximizing the long-term health of your company. “

It’s good to hear some common sense in this department, after many years of the maximizing shareholder value mantra.

Seems there’s a parallel to the current debacle over the sales of Danish TDC: Should we manage for short term profit or long term growth? Here, management is voting for the short term, while one of the main investors (5.5%) is taking the long term view.