Top of Mind

In the Financial Times, Martin Wolf writes: “Almost nothing in economics is more important than thinking through how companies should be managed and for what ends. Unfortunately, we have made a mess of this. That mess has a name: it is ‘shareholder value maximization.’” Suggesting that companies are tools for sustaining long-term commitments, he says that the short-termism often associated with maximizing value is undermining their purpose.

Yale Insights talked with Lynn Stout about the shaky legal basis for the primacy of shareholder value and the evidence that inordinate focus on shareholder value actually hurts returns.

11:05 AM - 28 Aug 14
Matthew Spiegel & Heather E. Tookes — The initial public offering (IPO) market recently saw its busiest week since 2001. A new study by Yale School of Management professors Matthew Spiegel and Heather Tookes reveals how these and other IPOs affect rival firms over time. Read More
Florian Ederer — Somehow ice and cold water have become the social media phenomenon of the summer. Millions of people have shivered and screamed while dumping buckets of ice over their own heads, and a medical charity has tens of millions of dollars raised as a result. Yale Insights spoke with Yale economist Florian Ederer to try to make sense of all of this. Read More
Amy Wrzesniewski — Laboratory experiments have suggested that, counterintuitively, having both an internal motivation for completing a task and an external reward makes performance weaker. A study by Yale SOM’s Amy Wrzesniewski tested this idea in the real world, by examining how the motivations of West Point cadets affected their performance. The results have strong implications for how leaders can get the best performance from their organizations. View Video
Amy Wrzesniewski & Barry Schwartz — What kinds of motives are most conducive to success? In a New York Times op-ed, Professor Amy Wrzesniewski and coauthor Barry Schwartz discuss their research looking at the motives of new West Point cadets and how they relate to success as Army officers. Read More
Carolyn Everson — Will the rising tide of mobile ad spending lift all media-company boats? Or will only the shrewd and the quick be able to capitalize on the trend toward more media consumption on mobile? Facebook’s Carolyn Everson describes how the company has made itself mobile-first. View Video
Nancy Pfund & Daniel Gross & Stuart Patterson & Rosemary Ripley — Green tech investors want to put their money behind firms with the potential to disrupt their industries and bring both positive environmental impacts and financial success. But what’s disruptive is by its nature unprecedented and unpredictable. How do investors assess the potential of a green technology company? Read More
Marian Chertow & Shawn Heath & Rich Kidd & Manuel Gomez Pena — Sustainability leaders often have to interact with a wide range of stakeholders with varied interests and incentives. They need to figure out the best way to engage, communicate, prioritize, and implement—in other words, to persuade. According to a panel of sustainability executives, that can mean sidestepping the language and baggage of sustainability entirely. Read More
Gina Rosselli Boswell — The theoretical possibilities for big data are limitless, but putting so much information to good use requires big thinking. Unilever’s Gina Boswell explains the principles that the global company uses to effectively mine its data troves. View Video
Robert J. Shiller — Recent research, drawing on behavioral economics, suggests that donors make larger contributions to a nonprofit organization when they have a sense of active involvement in the organization's mission. In an op-ed for the New York Times, Professor Robert Shiller suggests that changes to legal and institutional structures could be powerful new tools to increase engagement and giving. Read More
Ranji Nagaswami — Millions of government workers in the U.S. are relying on pension plans for retirement, and yet these plans are underfunded by at least $1 trillion. Asset manager Ranji Nagaswami ’86 argues that addressing this challenge is about more than assets and liabilities—we have to look at how funds are run and, critically, how they think about risk. Read More
Olav Sorenson — Merger performance varies greatly depending on the number of pre-merger third-party ties connecting the acquiring firm to its partner, according to a new study by researchers at the Yale School of Management and INSEAD. Read More
Laszlo Bock — How do companies with rapidly evolving business plans and a constantly shifting competitive landscape hire the right people for tomorrow, let alone next year? While education and training still matter, Laszlo Bock, head of people operations at Google, says that the company looks for people with the ability to learn, solve problems, and step in when leadership is needed. View Video