Resources
We conduct original research on the causes of short-term business decisions and work to find practical solutions.
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.
Investor-Corporate Engagement | Press Release
24 October 2017 - Boston, MA, October 24, 2017– FCLTGlobal, a not-for-profit organization that works to encourage a longer-term focus in business and investment decision-making, today published a report, Moving Beyond Quarterly Guidance: A Relic of the Past, calling into question the need for quarterly guidance to shareholders and investors. The report debunks long-held industry misconceptions about the importance of short-term earnings guidance, and argues that companies and investors should move away from this practice. Key findings from the report show: Providing quarterly forward earnings guidance (as distinct from quarterly reporting) is increasingly on a downward...
Investor-Corporate Engagement, Earnings Guidance | Report
23 October 2017 - Since 2005, research has consistently found that the vast majority of corporate executives think that short-term pressure is growing, that it is changing their business decisions, and that those changes are destroying value. One effective way that corporations are combating this phenomenon is by moving away from quarterly earnings per share (EPS) guidance and instead providing investors with a long-term road map focused on the fundamental economic drivers of the business tied to management’s outlook on critical key performance indicators (KPIs). As we highlighted in our...
Governance | Article
17 October 2017 - FCLTGlobal’s Sarah Williamson, CEO, and Matthew Leatherman, Director of Research, recently sat down with Ronald O’Hanley to discuss the importance of long-term investing and the role of the board in affecting long-term change. Ronald O’Hanley is President and CEO of State Street Global Advisors, the investment management arm of State Street Corporation and an FCLTGlobal member. Sarah Williamson: What does long-term investing mean in a State Street Global Advisors context? Ron O’Hanley: As the third-largest asset manager in the world, we manage roughly $2.6 trillion, of which about $1.5 trillion in...
Article
17 October 2017 - Over the past few weeks, FCLTGlobal and several of its Members met at forums in both London and Singapore that underscored the rising importance of long-term decision making to managers and investors internationally, and the rapidly growing desire for change. Our first stop was in Singapore to take part in the second annual Insights Forum, hosted by GIC, one of the world’s largest investment firms. The event brought together over 100 senior business leaders to weigh in on the theme “Asia’s evolving role in an uncertain...
In the News
12 October 2017 - A decade to the day since the precrisis peak of U.S. stocks, it has become easier and easier for investors to take a long-term view. Those who bought on the day the S&P 500 hit its top on Oct. 9, 2007, and held on through the subsequent panic and market collapse, have more than doubled their money, including dividends.
Video
25 September 2017 - CEO Sarah Williamson discusses FCLTGlobal's achievements and future plans. From GIC Insights 2017.
Earnings Guidance | Video
25 September 2017 - CEO Sarah Williamson shares her thoughts on quarterly guidance and companies' and investors' on going focus on quarterly results.