A Wildean view of M&S shareholder value

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This letter appeared in The Financial Times on February 10th, 2001


When Oscar Wilde described a cynic as a man who knew the price of everything and the value of nothing, he was using the word “value” in its proper sense. The authors of the study described in your story “M&S deemed to be worst for destroying value” (January 8) appear to be ignorant of this distinction between price and value.


They describe Marks and Spencer as having destroyed most shareholder value in the past three years. Correction: the price of M&S shares fell heavily in the past three years. This was the market’s delayed reaction to previous destruction of shareholder value. Creation and destruction of value are the result of how a company is led, how it innovates, what commercial decisions it makes and how well it listens to and learns from its customers, employees and suppliers.


As the M&S case reminds us, investors urgently need better yardsticks by which they can interpret future financial returns from current value creation. This – and not the charting of price fluctuations – is the proper territory for the study and enhancement of shareholder value.


Mark Goyder, Director, Centre for Tomorrow’s Company, 19 Buckingham Street, London WC2N 6EF