Philosophy

KBA’s philosophy is structured around six fundamental or core beliefs.

  • The primary economic objective of all listed companies is not to create shareholder wealth per se, but to build an enduring institution that has the ability to create wealth for its shareholders on an ongoing basis.

  • The way a company goes about creating shareholder wealth has an enormous impact on its ability to continue to do so on an ongoing basis.

  • Building an enduring institution that can create wealth for its shareholders on an ongoing basis requires that customer value creation and shareholder wealth creation be embraced as joint and mutually reinforcing objectives.

  • Business leaders can make a conscious choice to create customer value in ways that deliberately set out to enhance community wellbeing – should they consider this an appropriate course of action. The choice is between creating real value (stemming from the provision of useful, beneficial or healthy products or services, the consumption or use of which contributes to long-term wellbeing) and creating artificial value (which arises in large part from the satisfaction of a desire created by a consumer marketing campaign).

  • If sufficient companies elect to focus primarily on creating real or authentic value for customers, then there is every chance their actions will open up the possibility of a new and more socially responsible business paradigm.

  • Under that paradigm, the goal of listed company leadership teams will be to build enduring institutions that prosper through serving society: by creating real or authentic value for customers; by building significant wealth for shareholders; and by doing both in ways that quite deliberately set out to enhance the wellbeing of their employees, the wider community and the environment.

We believe and we can demonstrate that it is possible to create customer value, build shareholder wealth and enhance community wellbeing, all at the same time. Contrary to conventional wisdom; with the right mindset, the correct understanding and with an appropriate (i.e. long enough) planning horizon, the interests all of these stakeholder groups can be brought into alignment. We can also demonstrate that much of the contentious corporate behavior that many attribute to the pursuit of shareholder value maximisation, is actually the consequence of the pursuit of short-term earnings maximisation. This is rarely if ever in the long-term best interest of either shareholders or the many other stakeholders in a listed company.