DISCUSSION Price, value and the cynicism of Wall Street

by Mark Goyder _______19th May 2016

Oscar Wilde defined a cynic as someone who knows the price of everything and the value of nothing.

A recent Financial Times article (‘Close call in battle to be world’s most valuable company’, 14 May) reflects the cynicism of Wall St and the pressure listed companies face to ignore value in the worship of  price.

To assess the value of a company I need to know about innovation, product quality, customer perception, employee engagement, integrity and culture,  risks inherent in their strategy; their global footprint and their regulatory licence to operate; and through this assess the returns that it will generate for shareholders, and society.

Why should we ignore the true character and potential of a company while being so concerned about whether Apple or Alphabet/Google will temporarily have the biggest market capitalisation in the world?

Elsewhere the paper reports that more than half of the FTSE 350 companies with traditional pension schemes have paid ten times more in dividends than they have spent on fixing pension deficits.

There are two ways of thinking about a company’s value. One is to see it as a piece of financial engineering, from which impatient shareholders extract immediate payments.  The other is to see it as the engine of tomorrow’s growth. At a time when UK companies have become net savers to the tune of £100bn a year it is urgent that we reassert this second perspective.

Pandering to the short term cash demands of shareholders is bad for companies, bad for shareholders and bad for society.

To improve public procurement – use the Trust Test

Public procurement is too often solely made on price, and not enough on true value and to account for areas...

Serving All? How can employers support financial inclusion?

In January 2020, Tomorrow's Company co-hosted a major Financial Inclusion Summit, to launch our report into the role of employers...

Five ways businesses can think differently about mental health

Mental health in the workplace has gone from a fringe idea to being mainstream and top of the agenda in…

How can we #BalanceforBetter? By celebrating being good enough

Too often gender balance only celebrates women who have broken the glass ceiling. We need to do better for everyone...

Our favourite stories this week January 1-6 2019

Dear Readers, Here are a few articles published in the last few days that address issues – such as mental…

Featured Voice: Helen Buhaenko

We need a social contract that is fair, so that everyone has the chance to progress.

csuite podcast #76 – How connected brands drive growth

Joining Russell Goldsmith at the London offices of GSK to discuss this issue, were Kerry O'Callaghan, VP for Global Brand...

csuite podcast #75 – Social Mobility Live, 2018

Tomorrow’s Company is proud to announce a partnership with the c suite podcast, a monthly show covering topics such as Marketing…