Examples of long-term and short-term decision-making in the UK, Delaware and Germany: Gap-filling exercise in the context of the shareholder v. stakeholder debate and share ownership structure of the company

Abstract:

This paper explores the extent to which the law in the UK, Delaware and Germany imposes an obligation on directors of solvent public companies to take into account the long-term consequences of their decisions while establishing the content and scope of long-termism in these three legal systems.

This research draws on the academic literature and performs a gap-filling exercise by identifying examples of long-term decision-making in these jurisdictions, as well as examples of decision-making and conduct that is not long-term in nature. In the gap-filling exercise, case studies are presented in the context of (i) the contemporary shareholder v. stakeholder debate in corporate governance scholarship and (ii) the relevance of the share ownership structure of the company.

These two important debates are used as variables to cast light on the ambit of the notion of long-termism, and the structural differences and similarities between the corporate governance systems and concepts of long-termism in the UK, Delaware and Germany.