Suchergebnisse

This article uses "Contact," an art installation by Olafur Eliasson, and "anti-zoom," an essay by Bruno Latour to reimagine the problem of corporate short-termism. It investigates what it means to propose, under the gaze of law, that directors and investors look to the "long-term" when pursuing corporate purposes. The article contests that it is possible to zoom, as if using a telescopic lens, between the demands of different time frames. It is only after an extended amount of "contact" that one is able to plot the relation of the short to the long term and make sense of it, a finding that problematizes the corporate self-governance of time. A way forward is imagined that makes the thesis of anti-zoom fit for renovating corporate law.

It is often argued that corporations are too focused on the short term (i.e., they are "short-termist"). For example, during the 2016 U.S. presidential campaign, candidate Hillary Clinton urged companies to escape the tyranny of short-termism. Similarly, in the recent policy debate in the United Kingdom on the need to reform corporate governance and executive compensation, Bank of England's Chief Economist Andy Haldane stated that "[e]xecutive pay is a matter of profound and legitimate public interest. Pay practices can encourage short-term behaviour in ways which harm both firms and the economy." In this context, a recent article by Flammer and Bansal (FB) published in the Strategic Management Journal argues that long-term executive compensation can help mitigate short-termism. More precisely, FB show that the (quasi-random) adoption of long-term executive compensation leads to an increase in firm value, an increase in long-term profits, and is conducive to long-term investments such as investments in innovation and stakeholder relationships. In this Article, I briefly review the core arguments and main results of FB.