Means of Company's Driving Superior Shareholder Value Coursework

Means of Companys Driving Superior Shareholder Value - Coursework ExampleI introduced the balanced board which is a action report based on a broad set of both pecuniary and non-financial performance measures as the best strategic management accounting tool to be employed in the current business environment today. I also focused a bit on how shareholders could correct their interests with those of shareholders since present compensation plans such as the granting of stock options to CEOs have been unable to motivate managers to create determine for shareholders. I therefore recommended that managers should be compensated based on the amount of shareholder regard as that they take back and that it is also necessary for managers to be evaluated based on the amount of long-term economic value that they come since evaluating them based on short-term performance measures can make them be myopic and as a result engage in short-term activities to generate higher short-term results f or the short-term financial performance measures.Today, the current business environment has become characterized by the importance of the investor and the drive for shareholder value. Shareholder value is the value of a self-colored minus future claims (debt). Shareholder value is given by winning the net present value (NPV) of all future free cash flows to the firm plus value of non-operating assets minus future claims (debt). Non-operating assets let in marketable securities, excess real estate and over-funded pension plans, whereas future claims include interest bearing long-term and short-term debt, capital lease obligations, under-funded pension plans and contingent liabilities. Only when a firm earns a return on invested capital (ROIC) above the cost of capital can that firm be said to be creating economic shareholder value.