March 29 2012The World Economic Forum has finally released its long awaited -- at least by me -- report on long-term investing. And, drumroll, here it is: “Measurement, Governance and Long-Term Investing”
This entire WEF project is rad. Why? Because it’s all about using governance to extend the time horizon of investors. That’s what I’m all about! So I think it’s a fantastic initiative. Anyway, here are some great excerpts from the report (which you should take the time to read in its entirety):
“As no measurements exist that perfectly balance short-term performance management with a long-term outlook, governance becomes extremely important. In fact, the best long-term investors supplement imperfect metrics with sound judgment by tightly linking measurement and governance frameworks.”
“Misleading or incorrect measurements will result in long-term strategies that are at best suboptimal and at worst actually short-term and misdirected.”
“The central conclusion and recommendation of this study is that governing bodies and other external stakeholders need to act on the understanding that the performance of long-term investments unfolds over time periods longer than the quarter or the year, even when short-term measurements are used.”
Have a nice weekend!
