ASBR ICEIPI 2022, 03 March 2023
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The imbalance between shareholder rights and managerial authority can be regarded as the main reason for short-termism in corporate governance. So as to mitigate short-termism, a loyalty-share structure has been suggested to be an effective solution. By exploring the causes of short-termism, this essay focuses on how loyalty shares have effects on short-termism in business. Additionally, it evaluates potential risks of loyalty shares, including unfairness, unlimited dual-class share structure, loss of profits, and less liquidity. Finally, this essay demonstrates the assignment of loyalty shares can help to resolve the problem of short-termism derived from the imbalance between shareholder rights and managerial authority.
loyalty shares., corporate governance, shareholder rights, managerial authority, short-termism
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The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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