Not all shareholders have the same portfolio, nor the same time horizons. If what that company does has different impacts on different other companies, how do you decide between these effects (including that on the shares of the company itself) which is most worthy.

Yes, this is related to the point I raised in (a) above, "Different shareholders will hold different portfolios, and they will experience non-financial externalities to different degrees. Thus, there can be no metric as simple as share value." I think that this is a powerful objection to the hard reform option (shifting the definition of fiduciary responsibility).

Regarding differences among shareholders' portfolios, this objection is weakened somewhat (but remains powerful) if one is willing to adopt a model of the average shareholder; which might be something like "a fully diversified portfolio", whatever that means. This stance would bias decisions toward over-weighting broad benefits -- a bias relative to perfect adherence to the principle, but far from pathological from a social-welfare perspective.

I am not sure how the time-horizon issue affects the total-shareholder-value principle differently from the partial-shareholder-value principle. (Ha! An advance in tactical terminology -- total-value : partial-value :: Bolshevik : Menshevik :: Mahayana : Hinayana)

If you start worrying about shares of other companies that may be affected by the actions of that company, you get into impossible to solve conflicts of interests.

If this means conflicts of interest for decision makers in the conventional sense, then it arises with both the partial- and whole-value principles. In either case, an individual may have incentives to make improper decisions. The whole-value principle would, however, provide effective excuses for decisions that are in fact driven by conflicts of interest, along the lines of my point (c) above.
--------------

In the soft reform option, increasing total shareholder value would merely be a defence against accusations of wrongdoing through deliberate sacrifice of partial shareholder value. Here, the objections you raise seem substantially weaker, particularly if the burden of evidence regarding this is placed on the defence. Presumably, a prudent decision maker would take actions of this kind only when the external benefits are clear and enormous.

The hidden agenda in all this is to drive a wedge into a crack on the intellectual structure of what I have called orthodox market ideology, of the Friedman sort.

Words and ideas I offer here may be used freely and without attribution.