At Newday, we pride ourselves on thinking for the long-term, and addressing with tenacity the most pressing global challenges we face as a species. We view the global financial system as a potent mechanism for societal betterment when utilized to its utmost potential, and to date we have launched several portfolio strategies designed to highlight this potential for impact. Through this process, we’ve discovered numerous and remarkable ways in which companies can make a difference – and some fundamental limitations to the system in which they must operate to do so.
One significant constraint is that imposed by short-termism inherent to our current economic system. Publicly traded companies, who seek to maximize shareholder gains quarter after quarter in a challenging competitive environment, are faced with the practical and ethical dilemma of prioritizing the shareholder over the stakeholder. In this paradigm, core contributors to a company’s success end up as line items on a balance sheet – costs to be cut, rather than valuable resources to be invested in. We witnessed an example of this earlier this month when Activision Blizzard laid off approximately 800 employees despite posting a year of record sales and profits. Events like this make it clear to us that we must challenge the underlying assumptions of our economic system.
The 21st century demands consideration of a new form of capitalism, an innovative economic system for a modern and rapidly changing society, which solves the problems associated with the current short-term-oriented shareholder-centric mindset, and places emphasis on a comprehensive consideration of the public interest; A model which proposes to acknowledge and to reward, in an appropriate proportion, the entire array of stakeholders who drive a company’s sustainability and long-term success. We believe this philosophy should be accelerated towards mainstream acceptance and implementation, and as such we’re excited to announce the launch of our Stakeholder Capitalism strategy.
The Stakeholder Capitalism strategy is the world’s first strategy based on the concept of Public Interest Capitalism, which re-imagines the foundation of a financial system designed to drive sustainable socio-economic prosperity for all stakeholders. It provides investors with access to companies that maximize their corporate value by making long-term-based business decisions for all stakeholders resulting in superior financial performance. Built according to our proprietary investment methodology, the Stakeholder Capitalism model considers and measures fair distribution of value among all stakeholders, not to the exclusion of shareholders, but for the benefit of shareholders. The model considers long term corporate strategy and governance decisions as primary drivers of returns, and the model fairly distributes this created value amongst all stakeholders; employees, customers, suppliers, local communities, society, and the environment.