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End the Religion of ROE

Harvard Business Review

There is no more powerful question in a U.S. 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. Social media spending?

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Would You Want Carl Icahn to Run Your Company?

Harvard Business Review

And it was Icahn's dubious and seemingly destructive maneuvers at Dynegy, the once-prosperous power-generation firm where he owns a 15% stake, that had gotten BreakingViews writing about him in the first place.

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Idle Funds are the Devil's Playground

Harvard Business Review

The result has been an economic system built increasingly around the maximization of ROE. This put financiers in the strong position they have enjoyed since, since seekers of capital have been willing to bend to their wills. They would have had their capital tied up in productive assets.

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