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Business and Society Program
A Brief 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 “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.
The Early Years: 2003-2005
Deepening the Dialogue: 2006
From Private Dialogue to Public Action: 2007
Expanding our Scope: 2008-2009
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.
From Private Dialogue to Public Action: 2007
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.
- January 2007: At TIAA-CREF in New York City, the CVSG hosted a working meeting between corporate CEOs (e.g., Citigroup, Office Depot, Pfizer) and senior leaders of long-term oriented institutional investors. Outcome: CVSG agreed to find a common ground in the investor and corporate management communities and issue a set of Principles supportive of long-term management. Surprising consensus amongst participants but still substantive areas of disagreement remained.
- January - March 2007: Drafting committee defined a set of aspirational, outcome oriented (as opposed to process) principles.
- March 2007: Review of draft principles by business-labor-investor coalition, including CEOs of long-term oriented operating companies and institutional investors.
- June 2007: The Aspen Principles are released. See Press Page for some perspectives.
- July 2007 - present: CVSG members and friends of the Aspen Institute are working to promote the Aspen Principles and deepen the dialogue.
Expanding our Scope: 2008 - 2009
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. Dialogue around business best practices with a longer term focus included:
- July 21 - 22, 2008: A by-invitation CVSG Summit focused on board practice and public policy to support long-term value creation.
- September 17, 2008: Aspen CVSG co-hosted a symposium on Earnings Guidance & Long-Term Value Creation in NYC to shed light on best practices and alternatives to the current quarterly earnings guidance system that promote better investor-corporate communications. A summary of recommendations from the meeting was released in November and can be found here.
- December 15, 2008: Aspen CVSG co-hosted an intimate event at the NYSE entitled, "Communicating with Strength and Purpose in Times of Uncertainty," which looked at best practices in investor communications.
Following up on its July 2008 summit, CVSG began to facilitate a dialogue toward public policy solutions that can align business/market incentive systems with the long-term health of the commons, aiming to test the workable balance between enhanced shareholder rights and corporate regulation. During this time, the Aspen Center for Business Education's Corporate Governance and Accountability project created a "critical mass" of faculty partners and new materials that provides a strong foundation to broaden and deepen the examination of the purpose of the firm and various theories of corporate governance in the core business school curriculum.
Our focus for much of 2009 was devoted to the drafting of a set of public policy ideas for creating a more enabling enviroment 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.
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.
Conversations continued in 2009 with new, potential signatories to the Principles. In April 2009, the Casey Family Programs because our first foundation/ endowment signatory to the Aspen Principles. The Principles were also highlighted during the course of 2009 in several prominent venues.
In 2009, 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. On November 3-4, 2009, our organizing theme was the “Future of Capitalism” and we considered questions about capitalism’s future and began to illuminate innovations that model future-mindedness in business and on Wall Street.
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.
Finally, CVSG and the Center for Business Education collaborated on a June 4, 2009 roundtable on financial reform that included academics and practitioners, hosted by NYU and Ernst & Young.
Other links of interest:
Those who have been involved with the CVSG over the years.
The future of the CVSG.