Short-termism in the European Union

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    The 2007–08 global financial crisis gave rise to an extensive debate in the United States (US) on short-termism and its influence on agency relationships, incentives, and fiduciary duties. This debate and the consecutive legal creativity of US policymakers display spillover effects and constitute an influential source of inspiration for politicians and lawmakers in foreign jurisdictions. The European Commission currently proposes to amend the Shareholder Rights Directive (2007/36/EC) to counterbalance the financial sector’s alleged triumph over industry. The initiative is motivated primarily by traditional Anglo-American arguments, and contains provisions first introduced through Dodd-Frank.
    This Article explores the proposal and its justifications, followed by an evaluation of the suggested regulatory amendments. It highlights the influence of American debate and policymaking abroad, and argues that the short-termism concept, despite its contemporary authority in the post-financial crisis era on both sides of the Atlantic, is misguided, and even more so in the European context. The Article concludes that the proposed amendments should not be expected to solve short-termism problems or alter the corporate governance system in any significant way.
    Original languageEnglish
    JournalThe Columbia Journal of European Law
    Volume22
    Issue number1
    Pages (from-to)15-60
    ISSN1076-6715
    Publication statusPublished - 2016

    Bibliographical note

    Published online: 8. March 2015 as: "Re-Thinking Short-Termism in the European Union: Perspectives on the New Shareholder Rights Directive"
    The title was changed for the printed version.
    CBS Library does not have access to the material

    Keywords

    • Short-termism
    • Long-termism
    • European Commission
    • Shareholder Rights Directive
    • Institutional investors
    • Active ownership

    Cite this

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    title = "Short-termism in the European Union",
    abstract = "The 2007–08 global financial crisis gave rise to an extensive debate in the United States (US) on short-termism and its influence on agency relationships, incentives, and fiduciary duties. This debate and the consecutive legal creativity of US policymakers display spillover effects and constitute an influential source of inspiration for politicians and lawmakers in foreign jurisdictions. The European Commission currently proposes to amend the Shareholder Rights Directive (2007/36/EC) to counterbalance the financial sector’s alleged triumph over industry. The initiative is motivated primarily by traditional Anglo-American arguments, and contains provisions first introduced through Dodd-Frank. This Article explores the proposal and its justifications, followed by an evaluation of the suggested regulatory amendments. It highlights the influence of American debate and policymaking abroad, and argues that the short-termism concept, despite its contemporary authority in the post-financial crisis era on both sides of the Atlantic, is misguided, and even more so in the European context. The Article concludes that the proposed amendments should not be expected to solve short-termism problems or alter the corporate governance system in any significant way.",
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    author = "Therese Strand",
    note = "Published online: 8. March 2015 as: {"}Re-Thinking Short-Termism in the European Union: Perspectives on the New Shareholder Rights Directive{"} The title was changed for the printed version. CBS Library does not have access to the material",
    year = "2016",
    language = "English",
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    pages = "15--60",
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    Short-termism in the European Union. / Strand, Therese.

    In: The Columbia Journal of European Law, Vol. 22, No. 1, 2016, p. 15-60.

    Research output: Contribution to journalJournal articleResearchpeer-review

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