Found 7 article(s) for author 'Short-Termism'

Should Management Be Primarily Responsible to Shareholders?

Should Management Be Primarily Responsible to Shareholders? james Heskett, May 9, 2017, Opinion, “One of the most controversial theories in business management is again boiling over. Should management put the shorter-term interests of shareholders over the longer-term needs of the company? What do YOU think? asks James Heskett.Link

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Speaking of the short-term: disclosure horizon and managerial myopia

Speaking of the short-term: disclosure horizon and managerial myopia. George Serafeim, March 12, 2015, Paper. “We study conference calls as a voluntary disclosure channel and create a proxy for the time horizon that senior executives emphasize in their communications. We find that our measure of disclosure time horizon is associated with capital market pressures and executives’ short-term monetary incentives. Consistent with the language emphasized during conference calls partially capturing short-termism, we show that our proxy is associated with earnings and...” Link

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How to Kill Quarterly Earnings Guidance

How to Kill Quarterly Earnings Guidance. George Serafeim, June 18, 2014, Opinion. “Quarterly earnings guidance has outlived its usefulness. There are instances when it might be perfectly legitimate and value enhancing to issue earnings guidance in an effort to inform the market about material disruptions, shifts in the business model etc., but on the whole, the practice is not a helpful way of building a sustainable business that is geared to succeed in the long-term. By now it is well understood that the short-term focus by shareholders on quarterly earnings can impair firms’ ability to create long-term value…” Link Verified October 11, 2014

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Corporate Short-Termism – In the Boardroom and in the Courtroom

Corporate Short-Termism – In the Boardroom and in the Courtroom. Mark Roe, March 14, 2014, Paper. “A long-held view in corporate circles has been that furious rapid trading in stock markets has been increasing in recent decades, justifying corporate governance and corporate law measures that would further shield managers and boards from shareholder influence, to further free boards and managers to pursue their view of sensible long-term strategies in their investment and management policies. Here, I evaluate the evidence in favor of that view…” Link verified June 19, 2014

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The Myth that Insulating Boards Serves Long-Term Value

The Myth that Insulating Boards Serves Long-Term Value. Lucian Bebchuk, September 2013, Paper. “According to an influential view in corporate law writings and debates, pressure from shareholders leads companies to take myopic actions that are costly in the long term, and insulating boards from such pressure serves the long-term interests of companies as well as their shareholders. This board insulation claim has been regularly invoked in a wide range of contexts to support existing or tighter limits on shareholder rights and involvement. This paper subjects this view to a comprehensive examination and finds it wanting…” Link verified June 19, 2014

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The Long-Term Effects of Hedge Fund Activism

The Long-Term Effects of Hedge Fund Activism. Lucian Bebchuk, July 9, 2013, Paper. “We test the empirical validity of a claim that has been playing a central role in debates on corporate governance – the claim that interventions by activist shareholders, and in particular activist hedge funds, have an adverse effect on the long-term interests of companies and their shareholders. While this “myopic activists” claim has been regularly invoked and has had considerable influence, its supporters have thus far failed to back it up with evidence…” Link verified June 19, 2014

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Making the Numbers? ‘Short Termism’ & the Puzzle of Only Occasional Disaster

Making the Numbers? ‘Short Termism’ & the Puzzle of Only Occasional Disaster. Rebecca Henderson, November 2, 2010, Paper, “Executives at public companies are always under pressure to “meet the numbers” each quarter, often so much so that they sacrifice long-term investments in order to make everything look rosy in the short term. In this paper, Harvard Business School professor Rebecca M. Henderson and Sloan School of Management professor Nelson P. Repenning set out to reconcile the apparently contradictory strategies of short-term results and long-term investments.Link

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