Missing the Target

According to many political leaders, media outlets and corporate lawmakers, stock-market-driven short-termism—when corporations prioritize immediate results in the next quarter over long-term value—is harming the American economy and greatly increasing environmental, climate, and social damage. This popular view also sees short-termism as causing widespread declines in research and development (R&D) spending, harmful environmental policies, and degradation of the workplace. But the data does not support this black-and-white representation of short-termism and thinking that it does takes our eyes off of real solutions to these problems.

Professor of law at Harvard, Mark J. Roe has been studying the large corporation’s role in society and in politics for decades, writing on the subject for academic journals and the financial press, and testifying for Congress and the administrative agencies on the subject. His research focuses on corporate structures and how they relate to politics, interest groups, and popular opinions of the corporation.

In his soon-to-be released book, Missing the Target: Why Stock Market Short-Termism Is Not the Problem [Oxford University Press, 2022], Roe shows that blaming short-termism overlooks the real causes of declining investment, R&D cutbacks, environmental deterioration, and workplace conflict. By pointing to other sources of tension like accelerating technological change, policy uncertainty, and an increasing sense of workplace insecurity, he argues for a more nuanced understanding of the challenges to the American economy. With rigorous evidence and real-life examples of corporate transactions gone awry, Missing the Target will change the way we think about short-termism, with deep implications for companies, investors, policymakers, and the general public’s view on the rights and wrongs of capitalism. 

Mark J. Roe is the David Berg Professor of Law at Harvard Law School, where he teaches courses on corporate law, corporate finance, and corporate bankruptcy. Much of his research investigates how political forces shape, and are shaped by, the large corporation. These forces are examined in Strong Managers, Weak Owners: The Political Roots of American Corporate Finance (Princeton, 1994) and Political Determinants of Corporate Governance (Oxford, 2003), in which he shows how different corporate structures around the world result in large measure not just from economic differences, but from different political forces that empower or disempower groups in the corporation—labor, capital-providers, executives. Missing the Target: Why Stock Market Short-Termism Is Not the Problem does the same, pointing to why it’s politically convenient for many groups and leaders to assess stock market short-term as more pernicious than it is.

Roe also explored these questions of politics and American corporate lawmaking in a series of academic articles, several of which have been voted by American corporate faculty to be among the ten best of the year when published. He has provided commentary on business and finance legal issues in such publications as the Financial Times, Forbes, Project Syndicate, and The Wall Street Journal.

He received his B.A. from Columbia University in 1972, and his J.D. from Harvard Law School in 1975. He is a member of the American Academy of Arts and Sciences.