Here’s an article in the Business section of the Washington Post that some of you may find interesting: How the Cult of Shareholder Value Wrecked American business by Stephen Pearlstein. Pearlstein references solutions to SWM like impact investing and the benefit corporation. He sets forth regulatory and legal reforms that would encourage long-term corporate decision-making, including:
— The capital gains tax could be recalibrated so that short-term trading profits are taxed the same as wages and salary, while gains from investments held for long periods are taxed more lightly than they are now, or not at all. A small transaction tax could also dampen enthusiasm for short-term trading.
— The Securities and Exchange Commission could adopt rules that discourage corporations from giving quarterly earnings projections or guidance, while accounting regulators could insist that corporate financial reports better reflect long-term costs and benefits and measure long-term value creation.
— States could make it easier for corporations to adopt governance rules that give long-term shareholders more power in selecting directors, approving mergers and takeovers and setting executive compensation.