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Strategic Financial Management
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It is a basic assumption of finance theory, taught as fact in Business Schools and advocated at the highest level by vested interests, world-wide (governments, financial institutions, corporate spin doctors, the press, media and financial web-sites) that stock markets represent a profitable long-term investment. Throughout the twentieth century, historical evidence also reveals that over any five to seven year period security prices invariably rose.
This happy state of affairs was due in no small part (or so the argument goes) to the efficient allocation of resources based on an efficient interpretation of a free flow of information. But nearly a decade into the new millennium, investors in global markets are adapting to a new world order, characterised by economic recession, political and financial instability, based on a communication breakdown for which strategic financial managers are held largely responsible.
The root cause has been a breakdown of agency theory and the role of corporate governance across global capital markets. Executive managers motivated by their own greed (short-term bonus, pension and share options linked to short-term, high-risk profitability) have abused the complexities of the financial system to drive up value. To make matters worse, too many companies have also flattered their reported profits by adopting creative accounting techniques to cover their losses and discourage predators, only to be found out.
Robert Alan Hill - Personal Name
1st Edtion
978-87-7061-426-9
NONE
Strategic Financial Management
Management
English
2009
1-111
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