Dominic set out his arguments for capitalism for the long-term, what this means for finance and particularly what it means in the context of the City of London. He argued that the economic crisis proved that 'capitalism has become too short term,' and that 'a shift to long-term capitalism is vital for a company's success,' citing how emerging markets, particularly in Asia, 'invest twice as much as their Western peers, and grow two times faster.'
He outlined three recommendations for business leaders to help reform capitalism, strengthen the system and unleash the innovation needed for 'a new era of shared prosperity':
- Fight the tyranny of short-termism
- Serve stakeholders, enrich shareholders
- Act like you own the place
Dominic concluded by urging boards to be more long-term in their thinking, thus lessening the pressure on CEOs to focus on short term-results, noting that the 'average tenure of a CEO is now just six years.'
CIMA Chief Executive Charles Tilley reiterated this theme in his closing remarks, emphasising that 'the system is not fit for purpose...change is needed.' He called on accountants to play their part in the shift to long-term thinking through the use of integrated reporting and integrated thinking.
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