The short-term nature of stock exchange business models hampers the ability of boards to focus on long-term goals, says directors’ association.
Boards need to be "protected" from shareholders with a short-term investment horizon if they are to succeed in the pursuit of long-term value creation, according to the association representing directors across Europe.
Irena Prijovic, chair of ecoDa, was responding to the interim report and consultation from the European Union's High-Level Group charged with investigating sustainable finance.
"If sustainability is the goal, then companies and their boards need to be protected from shareholders whose short-term objectives hamper the respect of long-term perspectives," said Prijovic.
Lutgart Van den Berghe, chair of the policy committe
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