Value Based Management

Value-Based Management is a managerial approach in which the primary purpose is shareholder wealth maximisation.

The firm’s systems, strategy, processes, analytical techniques, performance measurements and culture, have as the guiding objective the addition of value to the firm.

It is useful to understand that Value Based Management includes all three of the following:

1. Creating value
2. Managing for value (governance, change management, organisational culture, communication, leadership)
   
3. Measuring value

Value Based Management aims to provide consistency of: 

• the corporate mission (business philosophy), 
• the corporate strategy (courses of action to achieve corporate mission and purpose), 
• corporate governance (who determines the corporate mission and regulates the activities of the corporation), 
• the corporate culture, 
• corporate communication, 
• organization of the corporation, 
• decision processes and systems, 
• performance management processes and systems, and
• reward processes and systems,