Capitalism is an imperfect system, but it’s the best model we have found, and each of us as part of that system also has a duty to preserve and repair it
INTERVIEW - Meet the editorial board: Dominic Barton
Keith Ambachtsheer invites: Dominic Barton as the next participant of this 'relay-interview'. Reason: 'He is the cofounder of the FCLT Global initiative which is set up to implement sustainable ‘long-termism’ actions around the world.'
What is your personal motivation to SHIFT TO?
Short-termism has cost the US five to six million jobs over the past 10 years and USD one trillion in growth – equivalent to 0.8% of GDP growth per year. Given the challenges on the horizon ranging from the automation of jobs to our ageing population, we must all collectively SHIFT TO a longer-term view of value creation – or put our future prosperity at risk.
How does this fit into your professional ambitions?
Fighting short-termism is a core professional passion of mine. Capitalism is an imperfect system, but it’s the best model we have found, and each of us as part of that system also has a duty to preserve and repair it.
In your opinion, where should the financial industry be in seven years’ time?
Investors should shift to a longer-term approach, in which multi-year horizons and more sophisticated health metrics than quarterly earnings should become the rule, not the exception. Equity investors also need longer lock-up periods (i.e., to derive the same benefits that PE investors gain from not having to worry about redemptions). Finally, compensation for fund managers should reward multi-year performance, as opposed to single-year benchmarks.
Who should we definitely hear from in this newsroom?
We should definitely hear from Randall Stephenson, the CEO of AT&T and a core member of the FCLT Global initiative. His ability to deliver exceptional performance while putting the long-term health of his company and stakeholders above short-term results (e.g., through innovative re-training programmes) sets a powerful example for other corporate CEOs.
And from FCLT's Sarah Williamson. As the CEO of the Focusing Capital on the Long Term (FCLT) initiative, she is the ‘tip of the spear’ when it comes to driving longer term behaviour by investors, corporates and boards.
Which issue is most urgent in your view/field of work?
Reversing the rise of short-termism is the most urgent issue. 65% of executives say that short-term pressure is increasing and until that trend is reversed, it will be very difficult to make progress on this issue.
Extra question from Keith Ambachtsheer:
How can the growing number of international agencies/collaborations promoting/fostering long-termism in investing (e.g. FCLT, UNPRI, CFA Institute, ICPM, 300Club, WEF, OECD, FSB, SASB, IIRC) best collaborate to create a tipping point that accelerates the adoption of long-termism in investing?
"I see the growing number of organisations as a positive sign that the message is gaining traction. The key moving forward will be to focus our messaging on what we believe to be the highest-impact intervention areas, and for each organisation to work in their areas of relative strength."
Dominic Barton invites Lars Dijkstra as the next participant to this 'relay interview'. Reason: Lars Djikstra and Kempen Capital Management are leaders in the push for longer-term thinking in the investment space.
And adds one question:
“What is one specific thing that your organisation is, or could be doing, to advance the cause of SHIFT TO?”
The members of the editorial board of SHIFT TO all have professional but also very personal reasons to join this initiative. In a ‘relay interview’ we learn more about their motivations as they ask each other: ‘Why do you want to SHIFT TO?’