Resources
We conduct original research on the causes of short-term business decisions and work to find practical solutions.
Article
2 August 2017 - Matthew Leatherman, Director of Research at FCLTGlobal, speaks to Theresa Whitmarsh about her commitment to longer horizon investing, corporate governance and the importance of being challenged by your board. Theresa Whitmarsh is Executive Director of the Washington State Investment Board, one of the United States’ leading institutional investors managing over $103 billion of state pension, insurance, and private assets. ML: Thank you for being part of our series of interviews with executive leaders in the FCLTGlobal membership community. What does long-termism mean to WSIB? TW: We have about 43 percent of our...
Article
28 July 2017 - Schroders and FCLTGlobal recently hosted a discussion with leaders from across the investment management industry to discuss how to create a better long-term investment environment in Europe.
In the News
8 June 2017 - In a 2011 article, McKinsey & Company chief Dominic Barton called on his global counterparts to adopt a longer-term approach to business planning in the wake of the financial crisis of 2007-2008. Two years later, McKinsey and the Canadian Pension Plan Investment Board (CPPIB) conducted a study of more than 1,000 board members and CEOs, and found out how pervasive “quarterly capitalism” has become: More than 40 percent of those surveyed said they set business strategy using a time horizon of less than three years,...
In the News
7 June 2017 - Sarah Williamson, CEO of not-for-profit initiative Focusing Capital on the Long Term, explains why quarterly guidance should be abolished and how IROs can get insightful feedback from investors.
Governance | Article
21 April 2017 - Impact of Reporting Frequency on UK Public Companies: Profs. Robert Pozen, Suresh Nallareddy, and Shivaram Rajgopal Weigh In The CFA Institute Research Foundation published a study examining the UK’s implementation of quarterly reporting requirements for public companies in 2007 – designed to foster increased transparency – and subsequent scrapping of these requirements seven years later in hopes of combatting perceived short-termism in UK equity markets and the misalignment of incentives throughout the investment chain. At FCLT Global, we are examining alternatives to quarterly or short-term guidance in an effort to...
Article
19 April 2017 - FCLTGlobal Director Matthew Leatherman recently joined the team from the North Carolina Department of State Treasurer where he served as Policy Director. Matthew discusses his reasons for joining FCLTGlobal and his mission to put top-down economic logic to the test… Q: Why did you decide to join FCLTGlobal, and what will you be working on? Working with FCLT Global was an easy decision for me. I had the opportunity, as part of the asset owner community, to watch the initiative gather momentum and then form into an organization. Throughout that...
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17 April 2017 - A new addition to the team, Ariel Babcock is an equity investment professional with over a decade of experience in the financial industry. We spoke to Ariel about her motivations for joining FCLT Global, and the goals she hopes to accomplish during her tenure. Q: Why did you decide to join FCLT Global, and what will you be working on? Over the course of my career in the investment industry I’ve frustratingly witnessed the swing toward shorter term capital allocation decisions (by both companies and investors) and the value...
Article
14 April 2017 - Matthew Brady is an exciting new addition to the FCLT Global team, passionate about driving practical change in the financial investments industry for increased efficiencies. We spoke to him about his background, motivations for joining FCLT, and what he determines as success for the organization. Q: Why did you decide to join FCLTGlobal, and what will you be working on? I joined FCLT because I have seen the detriments of short-termism and how it can perpetuate sub-optimal results. I wanted to be a part of a company that...
Article
10 April 2017 - Jonathan Bailey, Director of Research at FCLT Global, speaks to Else Bos about the practical steps asset owners should take to support sustainable long-term value creation. Else Bos is CEO of PGGM, a cooperative that provides services in the field of pension administration, communications, fiduciary advice and asset management to a range of Dutch clients. PGGM is perhaps best known for managing over € 180 billion in assets for PFZW, the second largest pension fund in the Netherlands. JB: Else, can you tell me a little about your path to becoming...
Article
17 March 2017 - Earlier this year, together with the McKinsey Global Institute, we co-authored an article in the Harvard Business Review, “Finally, Proof That Managing for the Long Term Pays Off.” Based on an analysis of 615 large and mid-cap U.S. publicly listed companies from 2001 to 2015, it highlighted the benefits to long-termism, including higher corporate earnings growth and overall financial performance, and a greater growth in job creation and GDP (a longer summary is available here). This generated much thoughtful discussion on the role of long-termism and economic growth from...
Article
10 March 2017 - We recently spoke to FCLT Global CEO Sarah Williamson following her attendance at the Asia Business Council 2017 Spring Forum in Vietnam, which focused on the need for patient capital and long-term stewardship at a time where there growing recognition among governments and businesses that traditional models are broken, as well as extraordinary pressure from stakeholders calling for the adoption of a longer-term view. Sarah shared her reflections on the Forum, the current state of long-termism in emerging markets, lessons learned from family companies in Asia, and the...
In the News
2 March 2017 - Schumpeter’s recent column on corporate short-termism suggests that “the solution is to prod incumbent firms to invest vast amounts and insulate their managers from investors” (February 18th). On the contrary, the solutions should be much more targeted to how capital markets really work. We are exploring two such solutions. One is rethinking the quarterly guidance process to engage managers with, rather than insulate them from, investors in their long-term strategic thinking. The second solution is to change the relationships and incentives between asset owners and fund...