End the Religion of ROE
Harvard Business Review
OCTOBER 20, 2011
corporation than "what's the ROE on that?" Return-on-equity hurdles threaten them all. ROE justifies the means. We think there's more to business success — and that something as straightforward as a simple equation could put capitalism on a better path. To an extent not widely recognized, it was an equation in the first place that gave ROE the power to dominate not just investment decisions, but an entire business culture.
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