Resources
We conduct original research on the causes of short-term business decisions and work to find practical solutions.
Article
10 March 2015 - On March 10, 2015 more than 120 senior global leaders from all parts of the investment value chain, including asset owners, asset managers, corporate boards, management and policymakers, gathered at the Long-Term Value Summit in New York. The Summit program was designed to take leaders on a journey: first reflecting on their personal roles as leaders; then examining the various challenges and actions that their respective link in the value chain must take; and, finally coming together to understand how true system-wide change can be effected. The...
Report
10 March 2015 - Insights from FCLT's Long-Term Value Summit, where more than 120 senior global leaders from all parts of the investment value chain, including asset owners, asset managers, corporate boards and management, met in New York in March 2015.
Strategy | Report
1 March 2015 - Asset owners, asset managers, corporate directors, and managers have the ability to unlock system-wide change, yet today too many of these individuals are the source of short-term pressure. An ideal market will always include a mix of investors with different investment time horizons and investment strategies. Time horizons will always vary by industry and asset type. Yet, across industries, long-term thinking goes beyond a product cycle, beyond the average tenure of directors or the CEO, and beyond a typical investment cycle. If the major players...
Governance | Report
2 February 2015 - Boards aren’t working. It’s been more than a decade since the first wave of post-Enron regulatory reforms, and despite a host of guidelines from independent watchdogs such as the International Corporate Governance Network, most boards aren’t delivering on their core mission: providing strong oversight and strategic support for management’s efforts to create long-term value. This isn’t just our opinion. Directors also believe boards are falling short, our research suggests. A mere 34% of the 772 directors surveyed by McKinsey in 2013 agreed that the boards on which they...
Report
1 January 2015 - The short-term thinking that pervades our boardrooms, our executive suites, and our financial markets has been spreading for years, slowly impeding the ability of companies to make the kinds of bold investments in the future that sustainable growth and a vibrant economy require. The financial crisis of 2008 and the global recession that followed, however, brought the issue to the fore and galvanized our two organizations to found Focusing Capital on the Long Term (FCLT), an initiative dedicated to uncovering practical solutions to reverse short-term...
Report
1 February 2014 - Since the 2008 financial crisis and the onset of the Great Recession, a growing chorus of voices has urged the United States and other economies to move away from their focus on “quarterly capitalism” and toward a true long-term mind-set. This topic is routinely on the meeting agendas of the OECD, the World Economic Forum, the G30, and other international bodies. A host of solutions have been offered—from “shared value” to “sustainable capitalism”—that spell out in detail the societal benefits of such a shift in the way corporate...
Report
23 January 2014 - The pressure on business leaders to deliver financial results in the short term has increased considerably since the economic crisis, according to a survey jointly commissioned by McKinsey & Company and Canada Pension Plan Investment Board (CPPIB)1 on time horizons in executive decision making.2 More than three‐quarters (79 percent) of the respondents told us that the time frame in which they personally felt the most pressure to deliver financial results was two years or less. And while 73 percent said that their companies should look...
Report
23 January 2014 - Short-term decision making runs counter to individual savers needs. Much of the capital in the chain originates with savers whose interests are long-term. Yet today few individuals’ directly invest their own savings into markets. Rather, the majority of capital works its way through the hands of multiple financial market participants before individual savers realize some return from the net cash received on their effective investments in corporations, multiple links down the chain from them. Unfortunately as capital weaves its way through this system, it is...