Rethinking Corporate Success: A Critical Review of Shareholder Value as a Driver of Corporate Financial Sustainability

Abstract

This critical literature review challenges the prevailing assumption that shareholder value maximization is sufficient to ensure corporate financial sustainability (CFS). Drawing on 25 peer-reviewed articles from the Web of Science (WoS) database, we synthesize theoretical and empirical perspectives to reveal fundamental tensions between short-term financial returns and the imperatives of resilience, multi-stakeholder accountability, and ESG integration. While Agency theory has historically anchored shareholder primacy, we highlight how Stakeholder theory, the Resource-based view, and Institutional theory expose its conceptual and operational limitations. Key gaps include conflating market valuation with genuine value creation, inadequate measurement approaches, and insufficient attention to emerging-market dynamics. In response, we propose an integrative governance framework structured around four pillars: (1) long-horizon performance orientation, (2) ESG-driven resource capabilities, (3) stakeholder-inclusive governance, and (4) systemic risk resilience. This framework repositions corporate governance as the central mechanism for shifting from narrow value extraction to CFS value creation. We conclude that a narrowly defined shareholder-value approach undermines CFS; instead, a holistic, governance-led approach is essential for corporate endurance and societal well-being in an increasingly complex global landscape.