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PRAISE FOR SAVING CAPITALISM FROM SHORT TERMISM

�As Rappaport keeps on speaking out for the realities surrounding investment and speculation, our society will profit as it builds on his keen insights.�
�from the Foreword by John C. Bogle, founder of the Vanguard Group

�Al Rappaport brings insight and wisdom to the short-termism debate, fully demonstrating the way perverse incentives are undermining public companies and capital markets.�
�John Plender, Financial Times

"In this rigorous, useful, and delightful book, Rappaport undresses short-term financial incentives for what they are: parasites that draw the value-creating innovation out of companies. And he shows how executives can align long-term value-creating investments with the right investors' expectations."
�Clayton Christensen, Harvard Business School

�How to make managers focus on the long-run is one of the most consequential and difficult questions in corporate governance and is the subject of much debate and disagreement. Professor Alfred Rappaport�s insightful book is a valuable contribution to this important debate.�
�Lucian Bebchuk, Professor, Harvard Law School, and coauthor of Pay Without Performance

�Saving Capitalism from Short-Termism insightfully exposes the contradictions by which we incentivize money managers to require short-term focus by company managers. Again and again in rereading this book, I am struck with the author�s felicitous style in raising subject after subject in which I have long been interested�but, until this read, have not been able to resolve. Buy it, read it, and enjoy.�
�Robert A.G. Monks, founder ISS (Institutional Shareholder Services), Lens Governance Advisors, and The Corporate Library

�Capitalism fails when corporate managers and professional investors prefer their own interests to those the true owners of businesses. In Saving Capitalism from Short-Termism, Al Rappaport shows how new incentives schemes can deliver shareholder value for the 21st century.�
�Edward Chancellor, author of Devil Take the Hindmost: A History of Financial Speculation and member of GMO's Asset Allocation team

About the Book

Business leaders today obsess over quarterly earnings and the current stock price�and for good reason. Corporate incentives typically focus on short-term profits rather than long-term value creation. Nothing is more harmful to businesses�and to the broader economy.

Few business thinkers in recent decades have contributed more to this subject than Alfred Rappaport. As an author and educator, Rappaport is a pioneer in developing the principles of values-based management and is an acknowledged authority on how to make long-term shareholder value the essential driver of corporate strategy. His latest work, Saving Capitalism from Short-Termism, is a clarion call for conquering the addiction to short-term profit�and getting on the path to building long-term value.

Rappaport�s solution to short-termism is simple but profound: business leaders must align the interests of corporate and investment managers with those of their shareholders and beneficiaries. His plan includes:

• Gaining the commitment of senior management and the board to long-term value creation as their governing objective
• Incentives that reward CEOs, operating-unit managers, and front-line employees for delivering superior long-term value
• A major overhaul of corporate financial reporting that provides more relevant and transparent information to investors and other financial statement users
• Performance fees that align the interests of investment managers and shareholders
• Actively managed funds with concentrated holdings and long investment horizons that tilt the odds in favor of better long-term shareholder returns

If corporate and investment leaders do not address the problem of short-termism, more financial crises may be in store�and they are likely to be more severe and broader than the meltdown in 2008.

The trade-off is clear: We can continue to pursue short-term profit at the expense of economic vitality, individual financial security, and perhaps even the dominance of the free-market system itself. Or we can take the responsible path outlined in this book and generate innovation, quality, growth, and value over the long term.