This paper will examine the role of the financial manager in maximizing shareholder value within today's financial markets. This paper will also compare the financial manager's perspective with the perspective of a shareholder with regards to maximizing shareholder value. Individuals trust that financial managers will have their best interest at hand when it comes to allocating their company shares. Therefore, individuals invest in businesses that are economically secure and able to offer them the best possible return. Once the scandal of Enron occurred, investors became apprehensive and hesitant about trusting other individuals to invest their savings. The end result of the Enron scandal and other scandals that occurred in the recent years, caused investors to require more accountability from accountants and stockbrokers. The link connecting financial managers and shareholders have to maintain a high level of interest in order to maintain the financial statements.
A financial manager can have many roles as well as many definitions. It can be one person or a team of people having power over the financial outcome of a company. According to Ross, Westerfield, & Jaffe, (2005) "the most important job of a financial manager is to create value from the firm's capital budgeting, financing, and net working-capital activities". Microsoft financial management defines the position that the financial manager in order to carry on a business needs to ensure the corporation has an almost endless variety of real assets. Many of these assets are tangible, such as machinery, factories, and offices; others are intangible, such as technical expertise, trademarks, and patents.
Other companies for example University of Texas mentions that the duties of financial ...