End the Religion of ROE

Harvard Business Review

corporation than "what's the ROE on that?" ROE justifies the means. 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. DuPont sent Donaldson Brown, a promising engineer-turned-finance staffer, to Detroit to sort things out, and sort them out he did. Most fundamentally, the objective of business must be broadened beyond ROE.

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