THE LONG-TERM IMPERATIVE: HOW COMPANIES CAN RESPOND
There is growing concern and recognition among public companies and institutional investors alike that the trading dynamics of our equity markets are too short-term focused, ultimately leading to corporate decision making that satisfies near-term financial goals while sacrificing long-term value creation. We have heard this message emphasised by large institutional holders such as BlackRock and State Street Global Advisors, the Business Roundtable and the National Investor Relations Institute (NIRI), among others. As a result, public companies are seeking methods to convey their long-term strategy for value creation to investors in a coherent and efficient way.
In an effort to contextualise this movement and provide tangible next steps for companies looking to respond to this imperative, Edelman partnered with Chief Executives for Corporate Purpose (CECP), a chief executive-led coalition at the forefront of the long-term movement, to develop the following action items.
Develop a long-term plan framework
CECP’s Strategic Investor Initiative, a coalition of companies, institutional investors and professional services firms, created a framework that provides public companies with a set of nine themes through which they can communicate the critical elements of their long-term strategic plan and respond to the informational needs of institutional investors. While the supporting data and direction of these themes will vary from sector-to-sector and company-to-company, the coalition has found that dedicating time to understanding and addressing these themes is a key first step in communicating the long-term mission and vision of the company.
Apr-Jun 2020 Issue
Edelman
CECP