The Canada Pension Plan Investment Board (CPPIB) and McKinsey & Co. are calling on business leaders to focus their thinking and actions on long-term value creation.
Announcing a joint initiative, called Focusing Capital on the Long Term, CPPIB president and CEO Mark Wiseman and McKinsey managing director Dominic Barton say institutional investors and corporate directors can play a pivotal role in fostering long-term thinking.
“We recognize the scale of the challenge in changing short-term attitudes and behaviours that have become all too ingrained in business, investment and society,” Wiseman says.
“There is strong evidence, across the value chain, that long-term thinking creates enduring benefits for companies, their investors and society, while short-term thinking destroys value,” Barton adds. “Our aim is to move quickly to action to address the issue of short-termism and develop practical tools and approaches to help institutional investors and corporate directors execute long-term strategies.”
During 2013, CPPIB and McKinsey will engage with leading institutional investors and corporate directors to identify structures and metrics that support longer-term behaviours and long-term value creation.
Next year, they will release their initial recommendations and push for the adoption of behaviours and mindsets that will foster a significantly longer-term perspective across the investment industry and in the boardroom.