Human Capital Handbook 2013: Breaking the Grip of Short-Termism – A Review


HPA-Consulting should be congratulated on the latest version of their Human Capital Handbook: Breaking the Grip of Short-Termism, the fourth volume in the series. This volume grasps a much talked about but until now barely acted upon issue, the short-termism of capital markets and corporate financial reporting.

The Handbook is a collection of articles which cover the challenges faced by CEO’s who believe that the market will punish them for any actions that depress short-term profitability; that short-termism drives behaviours such as excessive risk taking, the potential for deceptive reporting and myopic focus on turning short term profit at the expense of long term sustainability and, that economists and financial analysts seem to dodge both scientific and the intuitive truth about human behaviour by analysing economies and organisations as if they don’t consist of people and are in fact therefore destined to act and behave in non-linear ways. My favourite quote from the handbook resides in the piece by author Philip Whiteley, “financial data is nothing more than the by-product of human conduct. Whilst this is screamingly obvious, it is institutionally and ideologically denied”. Philip’s article explains the reasons why the current proposals for a change in corporate reporting are a step forward but don’t go far enough.

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Ali Gill

CEO, Crelos Ltd