Hypothesis: Few investors (even the ones that see some long term opportunity) want to hold stock for a very long term. This is for a variety of reasons, includi

Hypothesis: Few investors (even the ones that see some long term opportunity) want to hold stock for a very long term. This is for a variety of reasons, including liquidity, individual opportunity costs, risks, individual lifetime (if you're old you may be uninterested in a 20 year bet), obsolescence, etc. In the end that horizon dictates of the actions of a shareholder controlled company. So if the majority of the capital [holders] on the stock market are looking for near/medium term gains, you'll see boards that "maximize shareholder value" populated by those individuals. Their actions will maximize near/medium term value without much regard to long term. That the company could tank doesn't bother them; few investors in the market will be willing to go on a very long term bet against this stock, per the hypothesis, so the stock will do just fine in the near/medium term as a self-fulfilling prophecy; eventually those decisions may catch up and tank the stock, at which point most will jump ship with comfortable profit. It's well known that having a long term interest yields much better results on the stock market (viz Buffet, other large investors that control companies). Not every investor has this luxury. So I agree that it may be a good idea to change corporate structure if 1) the hypothesis is good 2) we want to see companies succeed more on long time frames (one might not necessarily want this, maybe with Darwinist ideals, or favoring rapid technological/structural change) In fact I've seen some companies recently do just that: deliberately neglect shareholder micromanagement in favor of the long term. Companies that retain founders or have CEOs with a strong vision are the ones more able to do this.