Search results for "Short termism"
showing 3 items of 3 documents
Were Prestigious Independent Directors Responsible for the Subprime Crisis?
2018
We study the independence ratio, as well as the prestige, reputational incentives, experience, and financial expertise of independent directors for 767 U.S. banks from 2000 to 2015, to concentrate on causes of the subprime crisis: short-termism, poor monitoring, and excessive risk-taking. We find that higher independence ratios decrease the monitoring quality of the board, increase short-term incentives for the CEO, and promote greater subprime risk-taking. Our results thereby suggest that, while official responses to the subprime crisis claim that banks were not independent enough, rising independence ratios following Enron and Sabanes Oxley were a major contributing cause of the subprime …
Explaining corporate short-termism: self-reinforcing processes and biases among investors, the media and corporate managers
2014
Based on the related literature in economics, organizational sociology and the sociology of finance, this article constructs a novel conceptual explanation for corporate short-termism, that is, the ...
Short-Termism: A Step Forward Toward Long-Term Performance or a Dead End
2018
The debate around short-termism and its effects on the economic life, rather negative than positive, is far from ending, having academics, practitioners, and pundits arguing on this topic. The purpose of this paper is to determine if short-termism is part of the process of creating long-term performance (value) in an organization or it is harmful for harnessing performance, by presenting the definitions of the concept, who are the main promoters of short-termism, opinions of both academics and practitioners, and studies and examples that sustain on the one side the fact that short-termism encourages the manipulation of numbers in order to meet quarterly earnings, by cutting investments from…