UK businesses need a long-term growth agenda: report
by Vikas Vij — Over the past few decades, British business has made significant progress in many areas – from better governance to leading in major industries. However, there are a number of areas where a visionary business approach is necessary to achieve global competitiveness and sustainability. Most importantly, the overall business focus must shift from short-term gains to long-term value creation.
The good news is that an alternative business approach already exists, which focuses on long-term purpose, values and relationships. Tomorrow’s Company has announced the conclusion of its year-long research project into the progress and prospects of British business. The outcome of this Futures Project is a report called UK Business: What’s wrong? What’s next?
The report highlights the global competitive advantage that UK businesses can gain through a long-term, sustainable business approach. This approach recognizes that success starts with engaged employees, satisfied customers and stable suppliers; with shareholder returns being the end result, not the starting aim. It is underpinned by a clear purpose and set of values that help guide behaviors, and a long-term view that embraces risk.
Tomorrow’s Company outlines several steps that UK companies, institutions, and policy-makers can take to build core competencies for a robust, growth-oriented future. These include:
- Simplifying the investment chain by reducing intermediaries to lower costs and provide savers a more direct connection to their investments
- Shifting focus for fund managers from fighting for a larger slice of the pie to growing the size of the pie
- Lengthening executive pay horizons to reduce the focus on short-term share price movements
- Focusing on in-depth analysis for long-term decision making through increased company disclosure, creating financial training courses, and hiring experienced analysts
- Fostering collaborative and reciprocal relationships with key stakeholders
- Improving corporate governance
- Encouraging diversity in business forms through promotion of employee ownership, adopting a stewardship approach to privatization, and ensuring public procurement is not solely based on price
- Formulating a coherent government policy to encourage investment and build healthy companies
Commenting on the findings, Mark Goyder, Founder and CEO, Tomorrow’s Company, said that UK companies should start purposefully investing in the long term, and they should be held to account by shareholders and boards in a climate reinforced by government policy. The report cites the examples of a number of UK companies that are already exhibiting a long-term approach, including Admiral Insurance, JCB, Adnams, and Unipart.
Source: Tomorrow’s Company
Image Credit: Flickr via Jon Bunge
This article originally appeared on Justmeans.