Resources
We conduct original research on the causes of short-term business decisions and work to find practical solutions.
In the News
5 June 2019 - Apple’s share price tumbled, bringing the rest of the market temporarily down with it. But that forecast Apple missed, known on Wall Street as quarterly “guidance,” is falling out of favor among many corporations, with some of the biggest names in business pushing for an end to one of the most common ways investors value companies.
Article
4 June 2019 - The expertise and rich experience of FCLTGlobal’s researchers is part of what makes our work unique and incisive. A prime example is Senior Research Fellow Bruce Shaw, the former CFO of Holly Corporation (later President of Holly Energy Partners) who is working on a study of long-term thinking among CFOs and assembling a checklist CFOs can use to ensure they stay focused on long-term success. Our Director of Research Communications, Evan Horowitz, sat down with Bruce to talk about his work and life. Hi Bruce. Thanks for much...
Mandates | Video
29 May 2019 - Institutional investment mandates constitute a mutual mechanism to align the asset managers’ behaviors with the asset owners’ objectives. These contracts define the relationships between asset owners and asset managers and play a crucial role in ensuring the success of these relationships over time.
Governance | Article
28 May 2019 - Building a long-term culture requires a clear and active commitment from a company’s leadership, as they have the unique stature to establish long-term strategies and support long-term initiatives throughout the organization. Long-term Habits of a Highly Effective Corporate Board, FCLTGlobal’s latest research on how corporate board’s impact company performance, identifies several established practices boards can employ in order to develop and eventually realize a farsighted strategic plan. These include: spending more time on strategy (regulatory and compliance-related tasks often consume significant board attention); holding company stock...
Article
23 May 2019 - The National Investor Relations Institute (NIRI), the largest professional investor relations association in the world, earlier this month announced the inaugural class of its “40 Under 40” recognition program. The 40 Under 40 Program recognizes those who “have made noticeable contributions to their companies, communities, the IR profession, and to NIRI”. Included in the list of talented young IR professionals is FCLTGlobal’s Ariel Fromer Babcock, a Research Director whose work has identified investor relations strategies that can promote long-term value creation for both companies and the shareholders who invest...
Risk and Resilience | Article
10 May 2019 - Boards and executives of long-term funds, such as pension plans, sovereign wealth funds, and endowments, need to manage portfolios to meet their long-term purpose, which may be decades or more into the future. In Balancing Act: Managing Risk Across Multiple Time Horizons, FCLTGlobal describes how laying out the goals and parameters of a fund can lead to a deeper understanding of the fund’s needs and provide greater conviction to maintain a long-term outlook in the face of market stress. Denmark’s largest pension and social security provider, ATP, takes as its...
In the News
12 April 2019 - To explore the most important factors influencing long-termism in the current environment, Toppan Merrill commissioned Mergermarket to speak with four leading experts for their insights. Topics of discussion include: • What effect, if any, has the push for ESG investing had on efforts to move toward long-termism? • Do you think recent interest in passive investment strategies makes it easier for companies to focus on the long term? • Are there particular regulatory changes you think would be effective at encouraging longer-term thinking at companies?
Investor-Corporate Engagement | Article
11 April 2019 - When considering going public, private companies often express concern about the perceived short-term fixation of public markets. In response, some choose to stay out of the public markets – to the detriment of our overall economic health. But other companies address this concern by issuing multiple classes of shares, each with different voting rights. Common practice is to assign more voting rights to one class of stock than the other, with the superior voting rights going to founders or other insiders. Issuing companies say that they take...
In the News
8 April 2019 - Sarah Williamson, chief executive, Focusing Capital on the Long Term, a US-based non-profit consortium of asset owner and managers dedicated to encouraging long-term behaviour, urged investors to refine and sharpen their beliefs. “At many funds, if you ask different members of the board what their beliefs are, you get different answers,” she said. Engrained beliefs are particularly important during market bumps when “ownership” of long-term strategies tends to fall away. She urged investors to hone their “purpose” and be clear about the things they find...
Earnings Guidance, Policy and Geopolitics | Article
5 April 2019 - Research has consistently found that the vast majority of corporate executives think that short-term pressure is changing their business decisions and harming long-term value. Recent work from FCLTGlobal has shown that an effective way to combat this phenomenon is by moving away from quarterly guidance. After calls from the White House and American business leaders in the latter half of 2018 to reexamine the standards for corporate guidance and reporting in American business, the U.S. Securities and Exchange Commission has requested public comment on how to enhance the investor protection attributes of periodic disclosures...
Policy and Geopolitics, Stakeholder Capitalism | Article
3 April 2019 - The global focus on responsible business practices has blossomed over the past decade. With that growth has come a greater awareness of concepts such as corporate governance, ESG integration, financial transparency, and fiduciary duty. Stewardship codes have become a tool to formalize the roles and obligations of corporations and investors alike. Administered by a variety of governmental agencies or independent regulators, stewardship codes now exist in over 20 countries worldwide, as well as in international associations like the OECD and ICGN. The United Kingdom was the...