The Search for a Long-Term Premium

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2017-07-17

Posted by Tim Hodgson, Willis Towers Watson, on Monday, July 17, 2017
Editor's Note: Tim Hodgson is head of the Thinking Ahead Group at Willis Towers Watson and executive at the Thinking Ahead Institute. This post is based on a Willis Towers Watson publication by Mr. Hodgson. Related research from the Program on Corporate Governance includes The Myth that Insulating Boards Serves Long-Term Value by Lucian Bebchuk (discussed on the Forum here).

Jaap van Dam, principal director of investment strategy at PGGM, one of the world’s largest asset owners known for its commitment to long-horizon investing, once asked what he called the million-dollar question: “Can we be reasonably certain that we will be rewarded for being a long-horizon investor? Because, if we’re not, then why bother?”

A sound answer to this question, as Jaap rightly put it, will determine whether long-horizon investing will really take off among asset owners.

(more…)