Are Companies too Short Term and is it Bad?

Tuesday, February 23, 2016
6:00 - 7:30 p.m.
Uris Hall, Faculty Lounge, third floor,
Columbia Business School

About the Event

A recent article in the Economist nicely put the issue of short-termism as follows: "Long-term thinking is a luxury....When managers are not striving to satisfy investors whose allegiance to firms is measured in weeks, they are pumping up share prices in order to maximise their own pay." But the article continues and dismisses these concerns by suggesting that passive asset managers are an effective countervailing force: "the rise of index funds whose holding period, like Mr. Buffett’s, is “for ever”. Larry Fink, the boss of BlackRock, the world’s biggest asset manager, asks firms to draw up five-year plans. Who then are the short-termists, manages or investors? Should investors leave managers alone, or have financial markets create ‘quarterly capitalism'? We will debate on whether short-termism is a concern and if so, what can be done about it.

Speakers

Patrick Bolton
Barbara and David Zalaznick Professor of Business
Columbia Business School

 

Wei Jiang
Arthur F. Burns Professor of Free and Competitive Enterprise
Columbia Business School