The missing role of controlling shareholders in the short-termism debate

39 Pages Posted: 11 Oct 2022 Last revised: 1 Aug 2023

See all articles by Tom Vos

Tom Vos

University of Antwerp

Date Written: May 25, 2023


Corporate short-termism, i.e., corporations sacrificing long-term value for short-term profits, has received a lot of attention in the corporate governance literature. However, the role of controlling shareholders in the short-termism debate has remained understudied, possibly because of a focus on US and UK governance systems. This paper addresses this by comprehensively analyzing the impact of controlling shareholders on the short-termism problem. Two conceptual models of short-termism are presented, one where short-termism originates with asset managers and institutional investors, and one where it originates with managers and directors. The paper then shows how controlling shareholders can eliminate short-termism in both models, but only if controlling shareholders themselves are not excessively short-term oriented, which depends on the type of controlling shareholder. The paper concludes with some policy implications, including with regards to loyalty voting rights and dual class share structures.

Keywords: Short-termism, controlling shareholders, agency problems, private benefits of control, family firms, loyalty voting rights

Suggested Citation

Vos, Tom, The missing role of controlling shareholders in the short-termism debate (May 25, 2023). European Corporate Governance Institute - Law Working Paper No. 728/2023, Available at SSRN: or

Tom Vos (Contact Author)

University of Antwerp ( email )

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