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Breaking the Short-Term Cycle

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Abstract

The CFA Institute Centre for Financial Market Integrity and the Business Roundtable Institute for Corporate Ethics held a series of symposia through 2005 and 2006 addressing the issue of short-term thinking in today's financial markets. This report and the proposals it contains reflect the opinions of panel participants in these meetings. Participants included corporate leaders, asset managers, institutional investors, and analysts. The report encourages all market participants to refocus on long-term value and provides recommendations concerning earnings guidance, incentives and compensation, leadership, communications and transparency, and education.

About the Author(s)

Dean Krehmeyer
Matt Orsagh
Matt Orsagh CFA, CIPM

Matt Orsagh, CFA, CIPM, is a director of capital markets policy at CFA Institute, where he focuses on corporate governance issues. He was named one of the 2008 “Rising Stars of Corporate Governance” by the Millstein Center for Corporate Governance and Performance at the Yale School of Management.

Kurt Schacht
Kurt Schacht JD, CFA

Kurt N. Schacht, JD, CFA, is Head of Advocacy for CFA Institute. He is responsible for all aspects of policy advocacy, regulatory affairs and legislative outreach, focused on advancing investor protection, financial market transparency and fairness. Kurt serves on a range of stakeholder advisory groups engaged on investment management policy issues and was the former chair of the SEC’s Investor Advisory Committee.

Prior to joining CFA Institute Kurt served as Chairman of the Investor Advisory Committee for the U.S. Securities and Exchange Commission. He has been involved in the investment management business since 1990, serving as chief operating officer for a retail mutual complex in White Plains, NY, general Counsel and COO for a Manhattan based hedge fund, and as chief legal officer for the State of Wisconsin Investment Board (SWIB) in Madison, WI.