The Horizon of Capital and Labor
Clara Raposo, in her opinion piece on May 12, 2021, questions which entity, capital or labor, possesses the longer time horizon, instigating a collective reflection. Drawing on her experience and previous studies in corporate governance and executive compensation, she analyzes the dichotomy between short-term and long-term objectives and the tension between the interests of shareholders and managers. The author discusses the contemporary debate on the social function of companies and the expansion of the concept of 'stakeholders', warning against the risks of naivety in delegating social responsibilities to CEOs. Raposo advocates for the clarity and measurability of corporate objectives and the importance of more stringent regulatory constraints to promote a fairer and more sustainable society, rather than fundamentally altering the objective function of companies.