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Firms should resist short-termism, create long-term value

BlackRock stresses long-term growth in its 2016 governance letter to CEOs.

Many companies on Wall Street continue to engage in practices that may undermine their ability to invest for the future. Companies should certainly support returning excess cash to shareholders, but not at the expense of value-creating investment.

OVER the past several years, I have written to the CEOs of leading US companies urging resistance to the powerful forces of short-termism afflicting corporate behaviour. Reducing these pressures and working instead to invest in long-term growth remains an issue of paramount importance for...