Transparency and disclosure will boost shareholder value

Three-quarters of business leaders polled last week by EY said that greater transparency and disclosure about long-term plans would have the greatest potential to ensure that activist investors create long-term value for all shareholders. The poll of 126 business leaders was conducted at last week’s 2016 Conference on Inclusive Capitalism.

The participants at the conference represent almost $40 trillion in assets under management. The poll also found that:

• 44 per cent said regulations enforcing long-termism would be the policy change most likely to generate the greatest urgency in creating more inclusive capitalism;
• 33 per cent said this could be achieve through fiscal stimulus;
• 50 per cent said that compensating investment managers according to long-term metrics was the most important role that asset owners can play in promoting long-termism and inclusive growth;
• 59 per cent said management was the most important voice in driving long-termism inside a company;
• 72 per cent said broader skills training initiatives is the most important investment to improve the status of workers.

Mark Weinberger, EY Global Chairman and CEO, said: “Long-term value will be sustainable if it benefits not just shareholders, but a wide range of stakeholders – from the people we employ to the communities where we operate.”