Business and Society Program

CVSG: Market Short-Termism in 2012

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 to think and act for the long-term.

In 2012, the strength of this unusual business-labor-investor coalition enables us to expand understanding of the ways companies and investors support the long-term health of society, to communicate broadly to build awareness and change, and to deepen engagement in policy dialogue. In 2012, we will:

• Conduct outreach: Continue to serve as a resource to companies wishing to better align their compensation, communications and metrics with a long-term perspective.
• Convene dialogue on business and investor practice: Identify business communication strategies that elevate long-term strategy and metrics, refocus investor analysis on sustainable value creating activity, and provide greater transparency to the market. Convene senior business executives and board chairpersons in cities around the US for a Peers & Provocateurs dinner series, in conjunction with Egon Zehnder International.

To date in 2012: On January 19, Aspen Institute CVSG along with 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 governance 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 the participants can be found here.

• Influence management thinking: Prompt business schools, professional associations, and other related organizations to challenge old paradigms that reward shareholder-centric, short-term acting behavior and advance new thinking about practices and policy that is multi-stakeholder and long-term oriented.

To date in 2012: Our by-invitation-only academic-practitioner roundtable series, "Rethinking 'Shareholder Value & Purpose(s) of the Firm" continues at NYU-Stern (March 1-2) and The Wharton School, University of Pennsylvania (November 1-2). You can view the roundtable synopsis and participant list here from our first roundtable on the same topic. The agenda for our March 2012 roundtable can be viewed here.