Voices
together scholars from the University of Oxford with 19 leaders
from the world of business, government and civil society, to look
at the implications of business as
usual and find practical ways to
overcome short-termism.
In business it is more difficult
than ever to balance the pressures
of today with goals for the next
decade. Business incentives tend
to revolve around swift successes;
increasing weight is attached to
mark-to-market accounting, quarterly returns and short-term incentive bonuses. Uncertainty in
global markets has led many companies and business leaders to seek
safety in quick returns on investment. Questions about the role
of government and unpredictable
behavior, such as was manifest in
the recent Washington stand-off,
compounds the problem.
It is not that the short-term is
unimportant. After all, if firms go
bankrupt there is no point in planning for the long term. We forget at
our peril that the private sector is
the largest source of jobs and that
flourishing companies are vital for
growth, and are a particularly valuable asset in a world that is still
suffering the cascading effects of
the 2008 financial crisis. Govern-
IAN
GOLDIN
HUFFINGTON
10.27.13
ment employment is contracting,
so the private sector must generate
the jobs required for economies to
recover from the crisis.
Sustainable growth, however,
requires that we go beyond the
immediacy of quarterly reporting.
While short-term measures can be
a pointer to sustainable growth,
they are not enough. Simply relying on short-term measures of
We need to rethink
corporate governance
so that owners and boards
embrace longer-term
mindsets and responsibilities
to society at large.”
success in business can create
longer-term instability and risk.
While the future is full of opportunity arising from the extraordinary advances of recent decades in terms of living standards,
life expectancy and economic development, it is also highly uncertain and characterized by a pressure on resources and economic
inequality. The rational actions of
individuals and firms when aggregated lead to escalating demand