Firms with a mission as a vector of the long term

Laure-Anne Parpaleix () and Blanche Segrestin ()
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Laure-Anne Parpaleix: CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique
Blanche Segrestin: CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

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Abstract: Since short-termism has come under criticism, how can a firm's strategic choices take account of long-term interests? Can long-term shareholding be fostered, and would it suffice? To answer these questions, this article examines how we apprehend the long term. Instead of defining it in relation to the investment horizon of a firm's plans, innovation forces us to see the long term as a firm's capacity for "regeneration", i.e., for recurrently renewing not just its product line but also its fields of innovation. From this perspective, the issue has less to do with shareholders keeping their stake in the firm during a cycle of product development than with their adherence to a "logic of regeneration". Two concepts recently introduced by the PACTE Act (raison d'être and société à mission) offer important means for making finance compatible with the long term. Corporate engagements on innovations for a desirable future can thus be entrenched in bylaws, beyond eventual changes of shareholders.

Date: 2019-11-14
New Economics Papers: this item is included in nep-bec and nep-sbm
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Published in Réalités industrielles. Annales des mines, 2019

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