Perspectives on the long term

What will it take to shift markets and companies away from a short-term way of thinking?

he call to reform capitalism seems both less and more urgent the further we travel from the Great Recession of 2008. Less so because that event recedes in memory—and more so because, nearly seven years after the crisis, we’ve yet to make meaningful reforms, despite many calls to action.

One issue is particularly essential: shifting markets and companies from “quarterly capitalism” to a true longer-term way of thinking, thereby renewing the fundamental ways we govern, manage, and lead today’s corporations. Achieving that change, however, requires wide-ranging shifts in both mind-set and practice. How might these be accomplished? For insight, we invited leading executives and academics to contribute essays to Perspectives on the Long Term (FCLT, March 2015), a book in which broad cultural observations help frame more specific viewpoints from each part of the investment value chain.

While Perspectives on the Long Term takes a comprehensive approach, what follows in this article is necessarily more impressionistic—a sampler, if you will, of today’s best thinkers on what it might take to instill long-termism into the capitalist system. Those writing here include Nitin Nohria, dean of Harvard Business School; Nicholas G. Carr, author of The Glass Cage: Automation and Us (W. W. Norton & Company, September 2014); Lim Chow Kiat, group chief investment officer at GIC; Ronald P. O’Hanley III, former president of asset management and corporate services for Fidelity Investments; and Charles Tilley, chief executive of the Chartered Institute of Management Accountants.

Our selection starts with two insightful looks at the psychological and technological obstacles to reform before moving on to more granular recommendations for board governance, corporate reporting, and the language we use when we talk about the performance of our investments.

Further reading: https://www.mckinsey.com/featured-insights/leadership/perspectives-on-the-long-term