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Curbing Short-Termism in Corporate America

Details

May 19, 2014 5:30pm - 7:00pm

Room 190

5:30 pm: Reception
6:00 pm - 7:00 pm: Lecture

 

About the event:

The clamor is rising against short termism -- judging a company by its performance over the last quarter, rather than the last few years. The Business Roundtable has been recently joined by the head of the largest asset manager and the Chief Justice of the Delaware Supreme Court in decrying the strong pressures for short-term results exerted by daily stock traders and activist hedge funds. According to these critics, these pressures are preventing corporate executives from making long-term investments needed for sustainable growth.

According to Robert Pozen, these criticisms of short termism are based on distorted facts and faulty logic. He argues that many of the proposed remedies would undermine the legitimate rights of shareholders. Instead, he thinks that in order to promote a longer term approach, corporate boards should lengthen the time frame for executive compensation, by basing bonuses on the performance of corporate executives over 3 to 5 years, rather than the typical one-year period.

Click to download: Curbing Short-Termism in Corporate America: Focus on Executive Compensation

About Robert Pozen:

Robert C. Pozen is currently a Senior Lecturer at Harvard Business School and a Senior Fellow at the Brookings Institution. In 2012, he won acclaim for a popular book showing professionals how to get more done at work, entitled Extreme Productivity: Boost Your Results, Reduce Your Hours.

In 2004, Bob became the executive chairman of MFS Investment Management, which now manages over $300 billion for mutual funds and pension plans. Between 2004 and 2010, MFS’s assets under management doubled.

During his distinguished career, he has been active in business, government and academia. Prior to joining MFS, Bob was vice chairman of Fidelity Investments and president of Fidelity Management & Research Company. During Bob’s five years as president, Fidelity’s assets increased from $500 billion to $900 billion.

In late 2001 and 2002, Bob served on President Bush’s Commission to Strengthen Social Security, where he developed a progressive plan to make the system solvent. In 2003, Bob served as Secretary of Economic Affairs for Massachusetts Governor Mitt Romney. In 2007, he served as chairman of the SEC's Committee to Improve Financial Reporting.

Bob is currently an independent director of Medtronic, Nielsen and AMC (a subsidiary of the World Bank). He is also a trustee of the Commonwealth Fund, a healthcare foundation.

Bob frequently writes articles for the Financial Times, the New York Times, the Wall Street Journal and the Harvard Business Review. He has published a book on the recent financial crisis, Too Big To Save? How to Fix the US Financial System, and a guide for investors entitled The Fund Industry: How Your Money is Managed.

Bob graduated summa cum laude from Harvard College and holds a law degree from Yale, where he also obtained a doctorate for a book on state enterprises in Africa. He lives in Boston with his wife of 37 years