Boston, MA, 30 September 2019 – FCLTGlobal, a not-for-profit organization that advocates for a longer-term focus in business and investment, released today a report that identifies the key predictors of long-term success for global companies and investors. The report, Predicting Long-term Success for Companies and Investors Worldwide, focuses on predictors of long-term value creation grounded in global data going back over time. These measurements look at the three primary actors along the global investment value chain: corporations, asset managers, and asset owners.
Among the main findings of the report is that global companies are currently falling short on behaviors that are favorable to creating long-term value. Based on FCLTGlobal’s model, which scores 5-year trailing return on invested capital (ROIC) weighted against a variety of long-term indicators such as fixed investment, revenue tied to R&D, and board gender diversity, companies are scoring lower today than they were before the global financial crisis of 2008. If companies were more long-term, FCLTGlobal’s research suggests they could earn an additional US$1.5T per year in returns on invested capital.
In order to track progress and improvements on these recommendation behaviors, FCLTGlobal has identified these long-term indicators using data that can be measured in a consistent way moving forward. Predicting Long-term Success tracks these indicators over the course of the past several decades in order to provide a snapshot of global long-term investment since the turn of the century.
“Measuring change is the only way to spark real behavioral shifts within the marketplace – companies and investors need to know where there is room to improve. This report is the first step in calculating the factors that are integral to creating long-term value,” said Sarah K. Williamson, FCLTGlobal’s CEO. “What we’ve found conclusively is that companies that are only focused on short-term gains end up with lower corporate profits, reduced shareholder returns, and limited job creation.”
Other key findings from the report include:
To read the full report or learn more about FCLTGlobal’s methodology on measuring long-term behaviors, visit www.fcltglobal.org/predictors.
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Ross Parker – Communications Manager
+1 617 203 6599