Shareholder primacy in UK Corporate Law: an exploration of the rationale and evidence

The aim of the research project was to examine the rationale for the traditional business objective in the UK, which is the maximisation of shareholder value (MSV). The project included an analysis of relevant aspects of the Company Law Review (CLR) process in the UK, which ultimately led to the Companies Act 2006 and which determined that shareholder primacy would be maintained as a key principle of UK company law. The CLR had raised the central question: ‘in whose interests should companies be run?’ and put forward two alternatives: one based on shareholder primacy, and the other based on balancing the interests of a range of stakeholders. The two alternatives were described as ‘enlightened shareholder value’ and ‘pluralism’.

ACCA research report 125


David Collison
School of Business, University of Dundee

Stuart Cross
School of Law, University of Dundee

John Ferguson
Department of Accounting & Finance, University of Strathclyde

David Power
School of Business, University of Dundee

Lorna Stevenson
School of Business, University of Dundee