The perceived dangers of “short-termism” in public capital markets have come to occupy center stage as a chief concern for corporate America. During the last decade, an emerging conventional wisdom has taken root among lawyers, business commentators, judges, policymakers and (at least some) investors, asserting that managers of public companies are too often pressured to pursue short-term gains at the expense of managing for long-term value. Although concerns about short-termism are hardly new (recurring for over a quarter century), the recent rise of hedge fund activism and corporate governance intermediation has added a sense of urgency—if not emergency—to the critical chorus warning of the perils of myopia.
Michal Barzuza & Eric Talley, Long-Term Bias, Harvard Law School Forum on Corporate Governance (2019).