Resources
We conduct original research on the causes of short-term business decisions and work to find practical solutions.
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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...
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13 February 2018 - Another January has come and gone, and another week of discussions at Davos has drawn to a close.
Mandates | 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.
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...
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...
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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...
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18 August 2017 - Over the past year, we have built on the work of the Focusing Capital on the Long Term Initiative to create a fully functional not-for-profit organization with an ambitious research agenda that is well underway. It has been an extremely busy and productive year, and we wanted to take this opportunity to highlight our progress and thank our members for their contributions to this important work. The highlights include: Research Launched our research agenda with member convenings and released two research reports and associated media with McKinsey: “Rising to the Challenge of Short-Termism,”...
Governance | 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...
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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.
Earnings Guidance | 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...
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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...