Business and Society Program
Business and Society Program
History of CVSG
Why CVSG exists: The Corporate Values Strategy Group (CVSG) was created in 2003 to reevaluate business practices leading to malfeasance and short sighted decision-making in business. Gaining inspiration from the Conference Board’s Blue Ribbon Commission on Public Trust and Private Enterprise’s “Restoring Trust” report, the Aspen Institute’s Business and Society program identified market “short-termism”—the increasing trend of businesses to pursue quarterly profit-making without giving adequate consideration to the long-term consequences of their decisions—as a symptom of irresponsible corporate management and unsustainable business practices.
Where we have been: From 2003 to 2007, our first stage of dialogue defined the problem and the second stage produced the common ground to guide market participants on three distinct areas: how to set long-term metrics, how to build communications between long-term oriented companies and investors, and how to reward and provide incentives for managers.
During 2003 - 2004, Aspen Institute and The Conference Board co-hosted breakfast roundtables and a day and a half long conference in Aspen, Colorado, bringing together business and investor leaders to discuss issue of short-termism, diagnose the problem, and brainstorm collective solutions. During the 2004 Aspen convening, William McDonough - then Chairman of the Public Company Accounting Oversight Board (PCAOB) -presented a challenge that has significantly shaped the direction of CVSG's work: if 20 companies with sufficient market heft coalesced around a set of practices, could they infect the market and help to rebalance the short and long-term focus of companies and markets, and thus secure a bright future for U.S. capitalism?
In response to this challenge, the Aspen Institute held three successful summits discussing best practices of businesses as well as external incentives in the policy environment. CVSG's network engages dozens of individuals and a select number of large cap companies, notably, Pfizer, Citigroup, GE, IBM, PepsiCo, and Office Depot, plus key professional service providers from Deloitte, Ernst & Young, and McKinsey.
In 2006 CVSG regularly convened CEO-level executives of Fortune 500 companies and institutional investors and created active working groups in the issue areas of Earnings Guidance, Corporate Metrics, Executive Compensation, and Boards. In addition:
- June 2006: The CVSG met at the Greentree Foundation in New York for a two-day summit exploring specific activities in the policy, regulatory, business, and investment practice arenas that could rebalance time horizons. Outcome: A detailed literature search, which provides strong evidence of the current short-term focus in corporate and investment decision making, and the document, "Short-Termism and U.S. Capital Markets: A Compelling Case for Change" emerged from this meeting.
- December 2006: Held a consultation with long-term oriented institutional investors, focused on practices and policies that amplify the voice of long-term oriented investors. Outcome: This dialogue laid the foundation for subsequent meetings of institutional investors and corporations.
In 2007 the CVSG was determined to move the dialogue from a semi-private realm to the public by issuing a series of Principles. The Aspen Principles for Long-term Value Creation were released in June 2007 with the input and collaboration of public companies, business associations, professional services firms, large institutional investors, labor union representation, and corporate governance experts. It is this coalition that will pave the way for more policy-oriented dialogue—and action in 2008 and beyond.
2008 saw continued outreach around The Aspen Principles, including presentations and presence at events including EPA Environmental Partnership Summit, Aspen Environmental Forum, Social Venture Network's Annual Meeting, Yale Governance Forum, Aspen Ideas Festival, the EABIS Annual Colloquium, Council of Institutional Investor's Autumn meeting, Babson Center for Women's Leadership conference, and the BSR annual conference. We received press coverage in a number of publications including the Wall Street Journal and the New York Times, and were featured in a cover story in Directors & Boards. New signatories to the Principles included Duke Energy, the US Chamber of Commerce, representing more than 3 million businesses worldwide, and compensation advisor, Frederic W. Cook & Co., Inc. Visit Archived Events to see more details on other 2008 activities.
Our 2009 was devoted to the drafting of a set of public policy ideas for creating a more enabling environment for long-term value creation that could be embraced by a diverse set of market actors. Participants at the CVSG 2008 summit identified key issues that might merit action in the public policy realm. Aspen CVSG began to engage with a small group of business, investor, and labor representatives to refine these ideas from October 2008 - March 2009. In early summer 2009, Aspen brought together individual thought leaders interested in these issues to draft a coherent set of ideas; three key leverage points for addressing market short-termism were endorsed initially by 28 individuals with deep experience in business, investment, government, academia, and the labor movement. This statement, “Overcoming Short-Termism,” was published on September 9, 2009 and additional signatories continued to be added. Press coverage was significant and related articles abound.
Other 2009 highlights included:
- On January 28, 2009 the CVSG hosted a small, off-the-record dialogue on responsible tax advising involving the major global accounting firms. A second discussion was held November 10, 2009 to continue the conversation. We continue to explore how to connect global sustainable development and poverty alleviation to transfer pricing practices.
- CVSG reached readers of the Wall Street Journal through a February 25, 2009 op-ed by BSP Executive Director Judith Samuelson and UCLA Law Professor Lynn Stout. Synthesizing insights attributed to CVSG dialogues over the years, the article used the federal administration's focus on executive compensation to highlight the wider problem of short-termism.
- The Business and Society Program launched "Aspen in New York," a public conversation modeled after the Aspen Ideas Festival and designed to look at business, society and leadership. Our organizing theme was the “Future of Capitalism” and we considered questions about capitalism’s future.
- On April 23, 2010 CVSG partnered with the schools of law and business at UCLA and the Fink Center at UCLA to host an academic-practitioner roundtable. The topic of the event was "Short-Termism: Leverage Points for Encouraging a Longer-Term Focus in Capital Markets."
- Senator Sherrod Brown (D-OH) held a congressional hearing on short-termism as chairman of the economic policy sub-committee of Senate Banking; originally scheduled for March 24, it was re-scheduled for April 29 due to the introduction of Senator Dodd’s financial reform legislation.
- The CVSG worked with The Concord Coalition to hold a roundtable with prominent tax economists in Washington D.C. on May 6, focused on tax incentives for more patient capital, building on one idea from our “Overcoming Short-Termism” public policy statement.
- An afternoon roundtable was held on June 2 with the Millstein Center for Corporate Governance focused on new academic research that calls into question the presumed links between CEO compensation and firm performance.
- An off-the-record dialogue was held June 9-11 in Aspen, CO focused on strategies for sustaining purpose and mission. For one perspective from the Summit, check out this blog entry from a participant.
- We hosted our 2nd annual Business & Society Forum in NYC on October 26-27. This year we focused on the question of “How to Measure Success.” More on the Forum can be found here.
- Several UK authorities referenced the 9/09 Aspen public policy statement during 2010 including a UK government call for examination of market short-termism and during a speech by the Bank of England's Executive Director of Financial Stability, Andrew Haldane.
- On January 19, 2011 Aspen Institute, the Committee for Economic Development (CED), and the Millstein Center for Corporate Governance and Performance at Yale SOM convened a small roundtable of academics and practitioners focused on research questions related to the role of institutional investors in the current corporate governance context. Based on this roundtable, the Millstein Center and CED published in October a working paper titled, Are Institutional Investors Part of the Problem or Part of the Solution?
- On March 16, we held a book talk with Professor Lynn Stout, author of Cultivating Conscience: How Good Laws Make Good People, which was moderated by Floyd Norris of the NYT.
- On June 8, we held a book talk with author of Fixing the Game and Dean of the Rotman School of Management, Roger Martin; the talk was moderated by Andrew Ross Sorkin of the NYT.
- We held an off-the-record summit July 11-12 that focused on operating in the real versus the expectations market drawing upon Roger Martin’s recently published book. A list of participants and reflective summary from the summit are available.
- In late September 2011, we held an academic-practitioner roundtable with the UCLA School of Law on “Rethinking 'Shareholder Value' & Purpose of the Firm.” You can view the roundtable synopsis and participant list here.
- On January 19, Aspen Institute CVSG, the Committee for Economic Development, and the Millstein Center for Corporate Governance at Yale SOM held a follow-up roundtable of academics and practitioners focused on the role of institutional investors in the current corporate context and based upon the working paper, Are Institutional Investors Part of the Problem or Part of the Solution?, published in October 2011. A list of participants can be found here.
- In February, we began to formally explore creation of a new fellowship for future leaders in the financial ecosystem. Over the course of 2012, we met with a number of industry veterans, current executives, leadership development experts, and others as we build an Executive Advisory Council, design the fellowship, and raise funds to launch the pilot class (target, Spring 2014).
- Our by-invitation-only academic-practitioner roundtable series, "Rethinking 'Shareholder Value & Purpose(s) of the Firm" continued at NYU-Stern (March 1-2) and the Wharton School, University of Pennsylvania (November 1-2). For more information about this work, please visit our Purpose of the Corporation page here.
- In 2012, we continued the "Peers & Provocateurs" dinner conversation series with Egon Zehnder International focused on the role of the board in creating and maintaining long-term value for shareholders and society. The second dinner held April 18 in Chicago focused on "Value and Values" and included operating company CEOs and board chairs. Provocateurs included Dean Sally Blount and Mr. Harry Kraemer.
- On May 1, we began design of a prize competition to promote fresh thinking on "future mindedness in capital markets". The project has planning support from the John Templeton Foundation. Learn more at aspeninstitute.org/prizethefuture.
- In early June, we began Phase 1 of a project inspired by the Aspen Principles and Generation Investment Management's "Sustainable Capitalism" whitepaper. The goal is business leadership to model and drive change to promote practices and protocols that result in longer-term value creation and sustainable capitalism. As part of this project, focus groups were held in London on November 9 and New York City on December 3 with heads of investor relations from public companies (like Marks & Spencer, J&J, and PepsiCo) and senior staff from large institutional investors (like CalPERS, Ontario Teachers' Pension, USS Ltd., and Wellcome Trust).
- On June 20, we held a book talk for Lynn Stout's Shareholder Value Myth in conversation with Jesse Eisinger and a Standing-Room-Only crowd.
- During the afternoon of June 21, we convened a group of top women in corporate governance for a celebration of the five year anniversary of the Aspen Principles and a look-ahead at the next five years and the top issues still posed by capital markets short-termism. A list of participants can be found here.
- During 2012, Judy Samuelson, co-leader of the Corporate Values Strategy Group, continued blogging on topics related to the long-term health of society on the Huffington Post. We also began a blog for Yahoo! Finance's The Exchange, with contributions from Aspen Institute staff and friends on topics related to market short-termism, the purpose of the corporation, and social intrapreneurship.
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Those who have been involved with the CVSG over the years.
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