Resources
We conduct original research on the causes of short-term business decisions and work to find practical solutions.
Article
16 February 2018 - The following, by Robert C. Pozen, first appeared on Fortune.com on Feb. 9. Should public companies focus on earning profits for their shareholders, or should they serve broader societal needs? Larry Fink, the head of BlackRock, the largest fund manager in the world, recently issued a letter to company CEOs stating: “Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.” Yet the same letter tells public companies that they should adopt a strategic plan with “a path to achieve financial performance.” The...
In the News
14 February 2018 - But CPPIB still has about 10 per cent of its assets handled by external managers in public market exposures. This style of investment management is not typically associated with the long term, so how the board works with those managers is important to maintaining a consistent long-horizon framework.
Article
13 February 2018 - Another January has come and gone, and another week of discussions at Davos has drawn to a close.
Incentive Alignment | Article
18 January 2018 - Asset owners often have very long-term investment goals such as funding liabilities, building an endowment for perpetuity or providing for subsequent generations.
Incentive Alignment | Video
11 December 2017 - At the Kempen Investment Seminar 4 October in London, FCLTGlobal CEO Sarah Williamson took part in a discussion on the future of investment mandates.
In the News
10 December 2017 - The Focusing Capital on the Long Term (FCLT) Global report released last week says the mandate rewrite would update a range of standard terms and conditions including fees, benchmarks and reporting to better align the relationship between asset owners and fund managers.
In the News
7 December 2017 - In a new report, FCLT Global, which advocates a long-term investment approach by pension funds and asset managers, provided 10 recommendations for setting up long-term investment mandates. The recommendations included replacing directly terminable contracts with five-year arrangements linked to a fee discount. Currently, the fee discount is often subject to the scale of the mandate. FCLT Global’s list also addressed the use of benchmarks that focused on the long term as a standard for absolute return funds.
In the News
6 December 2017 - The not-for-profit organization’s stated goal is to encourage investors, such as pension plans, to look at allocations through a longer-term lens. It brought together working groups of global institutional investors and asset managers to discuss what strategies are working, and ways to tailor investment mandates to bolster long-term success.
Incentive Alignment | Press Release
5 December 2017 - Boston, MA, December 5, 2017– FCLTGlobal, a not-for-profit organization that advocates for a longer-term focus in business and investment decision-making, has released its newest publication which presents a long-term model for drafting investment management contracts between asset owners and managers. The white paper, Institutional Investment Mandates: Anchors for Long-term Performance, discusses the status quo of such mandates and how the terms and conditions included can affect, either positively or negatively, long-term behaviors and investment partnerships. The research includes a “Top Ten” list of key components of long-term oriented mandates,...
In the News
5 December 2017 - The FCLT paper, Institutional Investment Mandates: Anchors for Long Term Performance, includes a top-10 list of recommendations for long-term mandates that covers fees, benchmarks, the term of the contract and performance reporting. It gives investors ideas for changing behaviours to better inform long-term thinking; for example, changing the frame of reference of performance reporting, and flipping the standard practice of listing short-term results ahead of longer-term outcomes.
Metrics | Article
30 November 2017 - Research consistently proves that many of today’s corporate executives believe that short-term pressure is growing, that it is changing their business decisions and that of their companies, and that these changes are destroying value for their shareholders. There are many ways to stem the tide of corporate short-termism – one being moving away from quarterly earnings per share (EPS) guidance, which FCLTGlobal has recently contended to be an unneeded industry relic. Rather than issue such guidance, companies would be better off providing investors with a plan focused on...
In the News
16 November 2017 - Earnings move markets. Last month, the Nasdaq enjoyed its biggest one-day gain in a year following blowout earnings from technology giants Amazon, Google and Microsoft. However, while earnings can highlight underlying economic trends, they can also obscure them. Earnings season is often dubbed cheating season, and for good reason. Every quarter, the vast majority of companies beat low-balled estimates. Not only that, companies can use all kinds of accounting tricks – both legal and illegal – to mislead investors.