Resources
We conduct original research on the causes of short-term business decisions and work to find practical solutions.
Metrics | Report
29 September 2019 - Through our research, FCLTGlobal aims to identify the key determinants of long-term success for companies and investors around the world. We then use this knowledge to encourage long-term behaviors across capital markets. This paper focuses on predictors of long-term health that are grounded in rich global data going back over time. Looking across the value chain—at companies, asset managers, and asset owners—we find the following: Global companies are falling short on long-term behaviors. Companies are scoring lower than they did in 2014, and well below the level reached...
Policy and Geopolitics | Article
26 September 2019 - Representatives from FCLTGlobal were delighted to participate in the European Securities and Markets Authority’s (ESMA) workshop on short-termism, held in Paris on 16 September 2019. ESMA’s work on short-termism followed a Call for Advice issued by the European Commission to develop a report presenting the evidence and possible advice on potential undue short-term pressure on corporations. The workshop was a series of structured segments based on research and evidence gathered by ESMA staff: investment strategy and investment horizon; disclosure of environmental, social and governance (ESG) factors and the...
Incentive Alignment | Article
23 September 2019 - “You get what you pay for.” When it comes to executive pay, the old adage holds true. Companies’ compensation committees typically evaluate their CEOs, like any employee, based on performance benchmarks, and like every employee CEOs will work to hit the benchmarks they are measured against. Because incentives drive behavior, poorly designed incentives can precipitate poor choices. Recent studies have shown that such benchmarks, and corresponding compensation packages, are incentivizing short-term decision-making at many of today’s public companies. To dig deeper into the issue and workshop possible...
In the News
19 September 2019 - American corporations often focus on quarterly earnings or short-term stock movements, but the real goal for long-term value creation is to build a business that can be a reliable source of growth for all stakeholders — customers, employees, communities and investors.
Governance | Article
16 September 2019 - Corporate boards are vital in helping companies maintain a longer-term focus while executing on shorter-term priorities. The board’s position atop the organization gives directors a wide perspective on a company’s current path, and allows them to shape its future by influencing purpose, culture, and direction. In The Long-term Habits of a Highly Effective Corporate Board, FCLTGlobal identified a number of steps directors can take to maximize their impact on the companies they oversee, one of which involves aligning directors’ interests with those of the company. Translating this intent...
Policy and Geopolitics | Article, Press Release
19 August 2019 - FCLTGlobal commends the Business Roundtable and all 181 CEOs that have signed on to today’s Statement on the Purpose of a Corporation. Research shows that creating long-term value is a critical part of a chief executive’s role, for a company’s shareholders but also for the many other stakeholders in its investment value chain – employees, customers, or the community in which it operates. It is important to clarify this responsibility, especially in a rapidly evolving global economy where businesses are looking for new ways to...
Policy and Geopolitics | Article
25 July 2019 - On 18 July, the U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance held a public roundtable to hear from investors and other market participants about the impact of short-termism on capital markets and whether its reporting system, or other aspects of its regulations, should change to address these concerns. View the full webcast of the roundtable here The first panel of the afternoon addressed the root causes and impact of a short-term focus on capital markets, and sought to help the SEC identify potential market practices and...
In the News
19 July 2019 - “That would really bother me,” Clayton told an SEC round table that zeroed in on complaints a short-term focus has surged in public companies while a long-term emphasis has waned to the detriment of retail investors. The regulator’s chief said the cost of SEC-mandated short-term, quarterly reports has discouraged companies from going public.
In the News
16 July 2019 - A growing body of research confirms that companies managed under a long-term strategic business plan substantially outperform their short-term peers over time. In addition, the primary referees of corporate law in the United States, the Delaware judiciary, are signaling a readiness to confirm there is a fiduciary duty for corporate directors to consider strategic business planning focused on sustainable long-term success.
Risk and Resilience | Article
9 July 2019 - On 30 May, FCLTGlobal Members and guests met in Boston for a peer-to-peer discussion on managing risk to support long-term value creation. The Forum on Risk: A Balancing Act provided a venue for participants to exchange examples of multi-horizon risk management, including successes in practical applications and challenges with implementation.
Risk and Resilience | Video
9 July 2019 - An interview with with Rocky Ieraci and Steven Richards from the Canada Pension Plan Investment Board.
Risk and Resilience | Video
9 July 2019 - An interview with with Fred Gjerstad from Washington State Investment Board.