About The Strategic Investor Initiative

We’re in the midst of a seismic shift: To create sustainable value over the long term, the market is increasingly focused on indexes and patient capital. Large investment houses are active managers, asking new questions—not about the quarter or about revenue goals but about a company’s plan to address mega trends. This shift is born out of the need to close the communications gap between investors and companies, to create a fundamental understanding of companies through the lens of growth, strategy, and risk.

 

Jamie Dimon, Warren Buffet, Senator Elizabeth Warren, President Trump, and others have called to question quarterly reporting. But looking beyond timing, the focus needs to be on content.

 

CECP’s Strategic Investor Initiative (SII) is working to reorient capital markets toward the long term by providing guidance to companies on how they can be more transparent about how they plan to create sustainable value. SII’s vision is to end quarterly earnings confusion by effectively providing the information long-term investors need on a regular, voluntary, public basis through investor-facing, CEO-delivered long-term plans. This effort is bringing together leading global companies and asset owners, pension funds, sovereign wealth funds, such as BlackRock, Vanguard, State Street, and Goldman Sachs. The Co-Chairs of SII are Bill McNabb, former Chair, Vanguard and Alex Gorsky, Chairman and CEO, Johnson & Johnson.

 

SII’s CEO Investor Forums provide a venue for CEOs to deliver to an audience of long-term investors their corporations’ strategic long-term plans, which are built upon the guidance of institutional investors set out in SII’s Letter to CEOs.

Within the themes of Risk, Growth, and Strategy:

  • DIFFERENT TIME HORIZON: 3 – 7 years, not the quarter
  • DIFFERENT AUDIENCE: More patient to permanent capital
  • DIFFERENT METRICS: Goals, metrics, and milestones; long-term strategy; the role of the board; not performance against quarterly or annual guidance
  • DIFFERENT FOCUS: Governance, role and composition of the board as it relates to long-term strategy, long-term megatrends, and material environmental, social, and governance (ESG) factors

Nearly 30 companies, including Aetna, Nestle, and Medtronic, have shared long-term plans with an audience representing in excess of $25T in AUM.

 

Contact Nandika Madgavkar to learn more. NMadgavkar@CECP.CO

 

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