Strategic governance - CFA Conference, 24 April, 2014, Chicago

Further research on designing investee company metrics, incentives, leadership to create long-term value

One of our partners, Mark van Clieaf, will be moderating the upcoming CFA conference on this topic (Chicago, 24 April 2014). We wanted to share a number of comments by the key speakers at the conference and have included the following links to documents:

  • "Designing investee company metrics, incentives, leadership to create long-term value" - Mark van Clieaf, Organizational Capital Partners, please follow this link
     
  • "Market Commentary" – Michel Lerner, Head of HOLT Europe, please follow this link
     
  • "HOLT: Linking Corporate Performance and Valuation to Management Incentives" – Michel Lerner, Head of HOLT Europe, please follow this link
     
  • "Time to rethink executive incentive programs" – Pre Bennett, Asia-Pacific Head of Corporate Governance and Responsible Investment, BlackRock, please follow this link

Strategic governance

Designing investee companies for 
“strategic governance”
 to create long-term value

Seventy-five percent of the 1,000 largest USA companies do not have the management structure, performance metrics and long-term incentives for balanced growth, innovation and long-term value creation for shareholders. The short-term and mostly compliance focus of many boards is a barrier to creating future value.

It is time to rethink the strategic planning horizon, operational performance metrics and longest accountable performance period for named officers (most companies have a 3-year or less incentive plan). Current long-term incentive design and Say on Pay and proxy voting must be realigned with long-term value creation for shareholders and society. Recent research by McKinsey / Canada Pension Plan Investment Board and Incentive Lab confirms the strategic governance disconnect and improvement opportunity for Directors and Named Officers.

One of our partners, Mark van Clieaf, will be moderating the upcoming CFA conference on this topic (Chicago, 24 April 2014).

Please find some context comments by the moderator by following this link