Page 8 - The Banks Summary (H)

Profit & Shareholder Value

Profit is often quoted as one of the primary objectives of
business but this tends to be used as a blanket objective.

It often does not explain how an organisation arrives at

the profit it achieves. Reducing costs will increase profit.

Increasing profit will maximise shareholder value. The

problem arises when the means adopted to increase

shareholder value is morally corrupt for example HSBC

and money laundering for criminal cartels or WFB and

senior executive compensation e.g. Tostedt. (2)