Short-Termism in European Corporate Governance - ECGI Conference Summary
On 30 May 2023, the Jean-Pierre Blumberg Chair at the University of Antwerp, Harvard Law School, and the European Corporate Governance Institute (ECGI) organised a conference on short-termism in European Corporate Governance, with the financial support of Gimv. The conference’s main goal was to improve the understanding in Europe of short-termism in corporate governance, as much of the current academic and societal debate on short-termism has focused on the US and UK. Focusing on European corporate governance is important, given that it differs in a few fundamental respects from corporate governance in the US and the UK, including the important role that large reference shareholders typically play in European corporate governance. The conference started with a keynote from Mark Roe in which the issue of stock market short-termism was introduced. Roe argued that the problem of short-termism is inflated due to policymakers who conflate corporate short-termism with corporate social problems and that the empirical evidence on short-termism remains inconclusive. In addition, Roe briefly commented on the cures for short-termism and their costs and presented different arguments which could explain the fixation of the public discourse on the phenomenon. During the different presentations afterwards, speakers and discussants commented on different aspects of corporate governance and their positive or negative impact on shorttermism. First, Xavier Baeten and Holger Spamann discussed the topic of executive compensation and presented some empirical evidence that illustrates the complex relation between different remuneration schemes and the financial and ESG performance of a company. Tom Vos and Federico Cenzi Venezze then analysed the missing role of controlling shareholders in the short-termism debate. Vos presented two conceptual models that can explain short-termism and argued that controlling shareholders can have a positive impact on short-termism depending on the circumstances and type of controlling shareholders. Their discussion was followed by a panel discussion on loyalty shares. The panellists presented empirical evidence on the use of loyalty shares in Italy and Belgium and agreed that loyalty shares are in practice mainly a control-enhancing mechanism that serves controlling shareholders. For the second keynote, Zacharias Sautner gave an overview of the empirical evidence on short-termism and concluded that although some indicators hint at a short-termism issue, there is no conclusive evidence of a systematic problem. Next, Sofie Cools and Anne Lafarre analysed the role of shareholder activism in short-termism and corporate ESG performance. Jesse Fried and Theo Vermaelen then critiqued the fixation of policymakers on shareholder payouts as proof of short-termism, before Kim Willey and Roy Shapira questioned the efficiency of quarterly reporting reforms in the fight against short-termism. In a final panel discussion, some prominent Belgian practitioners were invited to share their views on short-termism. The panellists discussed, among other things, the tension between investors’ short-term focus and companies’ long-term vision, the role of controlling (family) shareholders and the impact of ESG parameters on corporate decision-making.
Source (book)
Short-Termism in European Corporate Governance: University of Antwerp - Harvard Law School - ECGI Conference, 30 May, 2023, Antwerp, Belgium
18 p.
Research group
Publication type
Publications with a UAntwerp address
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Creation 21.12.2023
Last edited 23.12.2023
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