How is BVM different from shareholder value?
Shareholder value is a financial metric, primarily. It’s one component of business value, but not the only one (see above). Shareholder value doesn’t help managers understand the behavior and motivations of other key stakeholders (customers, partners, employees, managers, society) whose support is necessary for the firm’s long-term success. However, we believe that maximizing overall business value also maximizes long-term shareholder value on a risk-adjusted basis. In this important sense, both measures are aligned.
