Not-for-profit Focusing Capital on the Long Term (FCLT) Global is dedicated to encouraging a long-term outlook in business and investment decision-making. FCLTGlobal was founded by BlackRock, CPP Investment Board, Dow, McKinsey & Company, and Tata in 2016. A recently released paper discusses the role of the US public markets and argues that the private markets are no substitute. Public markets remain critical. FCLTGlobal acknowledges that the number of US publicly-listed companies are in decline. There were over 7,400 public companies in 1997 but 3,600 today. There also has been a decline in IPOs though the decline in IPOs has been concentrated in smaller IPOs (those below $100 million), which declined from about 400 per year in the 1990s to 105 since 2000. Despite these facts, the paper notes that there is still a strong case to enter the public markets. There are a number of approaches that successful long-term-oriented companies use, including:
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Having a well-defined shareholder strategy;
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Replacing quarterly guidance with long-term strategic roadmaps;
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Encouraging board-level engagement with shareholders;
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Emphasizing cumulative, year-to-date reporting in investor communications;
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Building strong, focused boards; and
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Aligning board incentives with long-term shareholders through long-term stock ownership.
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