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© 2019

Stock Market Short-Termism

Law, Regulation, and Reform

  • Includes a forward by Martin Lipton, founding partner of the law firm of Wachtell, Lipton, Rosen & Katz

  • Provides a detailed examination of the term ‘short-termism’ and its narrower application to the context of stock market investing

  • Examines the development of the stock market short-termism concept from the 1970s to its widespread usage post-global financial crisis

  • Explores the most significant regulatory and financial industry reforms to address the short-termism problem, and analyzes their effectiveness

  • Considers how the problem of short-termism is transmitted into listed companies and the harms of such short-termism

Book

Table of contents

  1. Front Matter
    Pages i-xxi
  2. Kim M. Willey
    Pages 1-20
  3. Kim M. Willey
    Pages 21-44
  4. Kim M. Willey
    Pages 45-70
  5. Kim M. Willey
    Pages 129-154
  6. Kim M. Willey
    Pages 155-193
  7. Kim M. Willey
    Pages 195-222
  8. Kim M. Willey
    Pages 223-264
  9. Kim M. Willey
    Pages 265-268
  10. Back Matter
    Pages 269-288

About this book

Introduction

Consideration of harmful short-termism in capital markets is prevalent amongst legal and business academics. It is also garnering increased attention in corporate board rooms and executive suites, and from the investing public. As a result, correcting perceived short-termism in capital markets has become a rationale for reform used by regulators across the globe. Despite the considerable attention given to this phenomenon, there has not yet been a comprehensive book analyzing the perceived short-termism problem, its sources and causes, and reform efforts undertaken to date. This book fills this gap by documenting the rise of the short-termism discussion, analyzing the significance of the problem, and considering the proposed legal remedies. Based on this analysis, a framework for effective short-termism reform is offered.

Kim M. Willey is a corporate mergers and acquisitions lawyer with 15+ years of experience advising boards of directors and senior executives of listed companies, including companies listed on the New York Stock Exchange, the London Stock Exchange, and the Toronto Stock Exchange. She currently advises as a corporate legal consultant, and teaches Business Associations at the Faculty of Law, University of Victoria, Canada.

Keywords

Global Financial Crisis Short-term Financial Objectives Short-Termism Corporate Governance Corporate Boards Capital Market Regulation Equity Market Stock Market Investing Equity Security Financial Intermediation Chain

Authors and affiliations

  1. 1.Faculty of LawUniversity of VictoriaVictoriaCanada

About the authors

Kim M. Willey is a corporate mergers and acquisitions lawyer with 15+ years of experience advising boards of directors and senior executives of listed companies, including companies listed on the New York Stock Exchange, the London Stock Exchange, and the Toronto Stock Exchange. She currently advises as a corporate legal consultant, and teaches Business Associations at the Faculty of Law, University of Victoria, Canada.

Bibliographic information

  • Book Title Stock Market Short-Termism
  • Book Subtitle Law, Regulation, and Reform
  • Authors Kim M. Willey
  • DOI https://doi.org/10.1007/978-3-030-22903-0
  • Copyright Information The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2019
  • Publisher Name Palgrave Macmillan, Cham
  • eBook Packages Economics and Finance Economics and Finance (R0)
  • Hardcover ISBN 978-3-030-22902-3
  • Softcover ISBN 978-3-030-22905-4
  • eBook ISBN 978-3-030-22903-0
  • Edition Number 1
  • Number of Pages XXI, 288
  • Number of Illustrations 5 b/w illustrations, 6 illustrations in colour
  • Topics Capital Markets
    Financial Law/Fiscal Law
    Corporate Finance
  • Buy this book on publisher's site
Industry Sectors
Finance, Business & Banking

Reviews

“With deep insight and reference to research on both sides, this book will be of great value to a wide range of interested parties, including asset managers, institutional investors, corporate directors and executives, market analysts, investment advisors, investment bankers, legal counsel, accountants and academics.” (Martin Lipton, Founding Partner of Wachtell, Lipton, Rosen & Katz)

“In this highly impressive work, Willey provides one of the most comprehensive and sophisticated analyses of stock market short-termism ever undertaken, spanning numerous jurisdictions and disciplinary fields. Its clear articulation of the concepts and terminology involved makes it readily accessible to subject-matter novices, while its deep theoretical insights and practical reform proposals make it an equally valuable resource for existing experts and policymakers. In many respects it marks itself out as being THE definitive academic exposition of the short-termism phenomenon.” (Marc Moore, Faculty of Law, University of Cambridge, UK)

“Kim Willey’s important new book is a tour de force of scholarship. It offers a comprehensive discussion, analyzing skillfully and with impressive depth the issue of short-termism in listed companies and suggesting ways forward. Scholars and policymakers in this area will undoubtedly greatly benefit from this text.” (Martin Petrin, Faculty of Laws, University College London, UK)

“Corporate short-termism has been identified as a critical problem seemingly necessitating a robust regulatory response. With investors trading frantically on the basis of the latest earnings data, public company executives reputedly struggle to implement a long-term vision. Pernicious economic consequences ostensibly follow. How have lawmakers responded to this challenge?  How should they respond? Kim Willey, in her timely book, examines these pivotal questions. She provides judicious thought-provoking answers by combining a mastery of the extensive short-termism literature with her own exhaustive analysis of regulatory trends. This book is a must-read for academics, policymakers, executives and investors.” (Brian Cheffins, Faculty of Law, University of Cambridge, UK)

“Kim Willey has picked up one of the few corporate controversies that engages the public and politicians, not just corporate lawyers and corporate directors:  is stock-market-driven short-termism damaging firms and the economy in a serious way?  Ms. Willey concludes that it is, but that finding cures that will work is not as easy as the general thinking has it.” (Mark Roe, Harvard Law School)