Bangkok Post, Thailand, Guest Column.

Dec. 11--At a recent meeting, the CEO of a listed company tossed the company's strategic business plan on the table and asked us a simple question: does this plan create or destroy shareholder value?

This CEO is not alone. He was asking a question fundamental to all managers -- will their strategy meet or exceed shareholders' expectations? Does the plan generate the economic returns that shareholders expect, or does it generate profits and returns that, while positive when measured from an accounting perspective, are not actually creating value for shareholders?

Shareholder value is created when the total economic return, as measured by stock price appreciation and dividends paid, meets or exceeds shareholders' expectations.

Too often management confuses positive earnings, as measured by accounting techniques, as equivalent to creating shareholder value. This is not necessarily the case.

How can a company tell if it has the correct infrastructure and management processes in place to deliver superior shareholder returns?

As a global leader in implementing value-based management programmes, L.E.K. Consulting is often asked to assess a company's processes, operations and financial performance from a shareholder value perspective.

One method we typically employ for this assessment is to explore, with management, five key questions that are critical for shareholder value creation: