Shareholder value in the case of Lloyds bank: 1980-2016

  • Gordon Mayze

Student thesis: Doctor of Business Administration


The 1980s saw a turn by corporations towards shareholder value, based on the arguments of neoclassical economics and finance where maximising shareholder value is framed as the optimal outcome for the firm and for society as a whole. While the financialization literature has critiqued the rise of shareholder value, there have been relatively few, long-term, single-company case studies of how the pressure from capital markets to deliver shareholder value impinges on individual giant firm strategy. Furthermore, there have been no cases which have studied individual banks. This research explores two research questions which addresses these gaps. The first research question explores how the concepts of bricolage and conjuncture can offer a critical perspective of shareholder value and studies the case of Lloyds bank. Lloyds adopted shareholder value in the early 1980s with a focus on return on equity and shareholder return. This period seen Lloyds grow from the smallest of four UK clearing banks, to the largest bank in the world by market capitalisation in 1998. However, within ten years, it was on the verge of near collapse after agreeing to acquire HBoS, and reliant on a bailout by the UK state in the form of direct capital and liquidity support and other guarantees A second research question then re-orients the analysis to explore how the Basel regulatory capital rules play a central role in shareholder value bricolage, from their introduction in the 1980s - through to the post crisis period in 2016. Basel has been presented as a form of calculative practice by regulators and scholars who draw on econometric studies of what is ‘safe’ capital in the banking system and set capital requirements accordingly. Using conjuncture and bricolage, this research argues the rules do not capture outcomes which follow as management attempt to deliver shareholder value. As well as presenting an account of the Basel rules and how they are adopted in an organisational context, the study presents a critical perspective to inform policymakers and regulators of the problems with the current Basel framework which has a narrow calculative field of vision. Finally, this research challenges the notion that shareholder value driven banking is optimal for wider society through demonstrating a set of problematic case outcomes and presents recommendations for a new co-ordinated policy and regulatory response. The aim is to contribute to more socially useful, de-financialized and safer forms of banking, enabling banking to contribute (and not exacerbate) to the societal challenges ahead in the 2020s and beyond.
Date of Award31 Dec 2021
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorIsmail Erturk (Supervisor) & Julie Froud (Supervisor)


  • cultural economy
  • Basel
  • banking
  • financialization
  • shareholder value
  • regulation

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