A large number of Irish publicly quoted companies are not delivering adequate shareholder returns, according to a survey by PA management consultants.

Companies that actively manage their operations to produce growth in returns for shareholders and companies that link executive pay to company performance produce the best results, PA has found. The survey found that £100 invested over 10 years ago in a company which did not manage for shareholder value would now be worth £339. But the same sum invested in a company actively pursuing policies and processes to promote growth in shareholder returns would be worth £673. The survey examined 20 firms quoted on the Dublin stock market and 112 firms listed in London.

It found that firms which actively manage for growth in return to shareholders have produced returns up to 27 per cent higher than those who do not. Managing for shareholder value (MSV) involves adopting policies and management processes and structures that are geared to maximising shareholder value.

Some 96 per cent of the survey respondents agreed with this philosophy. But only a very small number had actually put it into practice in any way and only 5 per cent had implemented it in full. Over a three year period, firms that were negative about MSV produced an average total shareholder return of 13 per cent. The return was 15 per cent for firms that were positive about MSV but had not implemented the processes.

It rose to 18 per cent where firms were positive about the principles and the processes.

"There are real and immediate dangers for companies which fail to recognise the trend," according to the head of PA's Irish operation, Mr Ray Nulty .

"Investors will become increasingly vocal as shareholder value remains below par."