7th International Sustainability Leadership Symposium

From Short- to Long-Term: Who Cares?

Institutional Investors, Beneficiaries and Investees in Dialogue

31 August/1 September 2006 Swiss Re Centre for Global Dialogue, Rüschlikon (Zürich), Switzerland

Theme

Many, if not most, players in stock market investment who pursue long-term strategies are driven by financial goals. The common objective of these players – institutional investors, asset managers as well as the ultimate beneficiaries – is to achieve maximum risk-adjusted returns over an extended period of time. Consequently, one would expect them to favour stable investments and to put a strong emphasis on companies' long-term performance. Yet, it is a fact that short-term earnings figures continue to play a dominant role in the way companies report their performance and investors make their decisions. This raises a number of important issues. First, from a financial perspective long-term thinking is futile if there are no reliable criteria to show that it can be translated into successful strategies that have a sustained positive effect on profitability. Second, short-term behaviour might be reinforced by the incentive structures in place for those who take the actual investment decisions. This suggests a potential conflict of interests with the ultimate beneficiaries. Third, how companies and investors communicate and interact with each other is strongly influenced by frameworks and regulations, in particular on corporate governance.

Key Questions

What issues are or should be taken into consideration by long-term oriented investors when investing in equity as well as corporate and government bonds in order to achieve maximum risk-adjusted returns over time?
Are the commonly used valuation and rating models appropriate to estimate the future cash flows of investees?
And what does the empirical evidence tell us about the success of long-term investment strategies?

Speakers

J. Frank Brown, Dean, INSEAD
Abby Joseph Cohen, Managing Director & Chief US Investment Strategist, Goldman Sachs
Hans-Peter Burkhard, Director, Center for Corporate Responsibility and Sustainability (CCRS)
Wilfried Hauck, Managing Director, Allianz Global Investors Advisory
Thomas Müller, CFO, Swiss Life
Heinrich Wiemer, Strategy Consultant, Capital Market Strategies
Jean-Louis Nakamura, CIO, Fonds de Réserve pour les Retraites
Dominique Biedermann, Executive Director, Ethos, Swiss Foundation for Sustainable Development
Travis Engen, former President and CEO, Alcan
Stefan T. Bichsel, Partner, Lombard Odier Darier Hentsch
Michael Bernegger, Head Asset Management, Swiss Life
Craig Metrick, US Head of Responsible Investment, Mercer Investment Consulting
Giuseppe Benelli, CIO, Vontobel Group
Peter Ohnemus, CEO & President, Asset4
Dominique Habegger, Head Research, Asset4
Hans C. Steckling, Chairman & CEO, HCS-Consulting
Brunno Maradei, Assistant Director, EIRIS
Ivo Knöpfel, Managing Director, onValues
Wim Vermeir, Member Executive Committee, Dexia Asset Management
Iris Bohnet, Associate Professor of Public Policy, Kennedy School of Government, Harvard University
Winston H. Hickox, Portfolio Manager Environmental Initiatives, CalPERS
Peter Voser, CFO, Shell
Thomas Scheiwiller, Partner, Head of Governance, Risk & Compliance Services, PricewaterhouseCoopers
Markus Nöthiger, Senior Manager, Global Risk Management Solutions, PricewaterhouseCoopers
Colin Melvin, Corporate Governance Director, Hermes Pensions Management
Brian Harrison Spence, Founder, economie
David R. Scott, Scott+Scott, LLC
Heiko Spitzeck, Director, oikos International
Gordon B Hagart, Senior Consultant, onValues