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ИД «Финансы и кредит»






Finance and Credit

Developing the theoretical and methodological basis of the value-based management concept

Vol. 26, Iss. 12, DECEMBER 2020

Received: 9 November 2020

Received in revised form: 23 November 2020

Accepted: 7 December 2020

Available online: 25 December 2020

Subject Heading: BUSINESS VALUE

JEL Classification: D00, G32

Pages: 2790–2812


Rozhkovskii A.L. PAO SAFMAR Financial Investments, Moscow, Russian Federation


Subject. The article provides a critical analysis of theoretical framework for the Value-Based Management (VBM), which is a generally recognized standard of corporate governance.
Objectives. The purpose is to identify key mistakes related to interpretation, and propose solutions to fill the gaps in the VBM concept.
Methods. The study draws on the methods of logical and comparative analyses, simulation modeling, and a cross-disciplinary approach.
Results. The study unveils that company's performance should be measured by its investment value rather than by its market value. Approaches to investment valuation are undeveloped, especially in the area of risks and required return on capital. Decision-making within VBM should be considered as a multi-objective problem, which includes at least three criteria, i.e. minimizing the time and budget for implementing management decision and meeting the interests of the most influential stakeholders. Corporate governance should be focused on maintaining the long-term trend in the rise in value, rather than on value maximization.
Conclusions. The most promising areas of further studies are the development of methods for measuring a company's investment value and the relative importance of decision-making criteria, as well as the ranking of the significance of stakeholders' interests. If developed, the theoretical and methodological framework for VBM will contribute to positive dynamics of companies' financial results, their performance indicators, and their value.

Keywords: value, value-based management, equity, stakeholder


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