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Are our businesses forced into short-termism?


Dorset directors believe short- term thinking is hampering the UK‘s economic growth and development and the financial crisis is forcing companies to concentrate on short-term survival rather than long-term growth.


”It‘s a catch 22 situation,” observed Warren Munson, Dorset chairman of the Institute of Directors (IoD). ”Short-termism is a corrosive influence on the UK economy and Dorset businesses would welcome action to rein it in, but the economic downturn has made things worse, forcing many firms to focus on their very survival rather than longer-term investment.”


As part of George Cox‘s recently- published independent report, Overcoming Short-termism within British Business: The Key to Sustained Economic Growth, the IoD carried out a members survey. It revealed that 92% of business leaders think short-termism is a significant impediment to the growth and development of the UK economy; 81% believe UK companies have become even more short-termist in their behaviour since the financial crisis


research and development, and 64% believe the main source of short-termist pressure in the UK economy is shareholder/investor pressure for short-term results, with 58% putting it down to uncertainty about the economic outlook and 48% blaming uncertainty about government economic policy.


Warren Munson, chairman of Dorset Institute of Directors


began; 64% say other countries take a longer-term approach to business than the UK (particularly Germany, China and Japan), which provides them with a significant competitive advantage.


In addition, 79% think short- termist pressures act as a disincentive to think and plan for the longer term, with some 60% saying short-termism creates a disincentive to recruit or invest in


Hendy extends from land to water


South coast automotive giant Hendy Group is adding marine products to its car, van and truck business after being awarded the Honda Marine franchise for the region.


Hendy Group has the country‘s first dedicated car and marine boutique following the opening of the new facility last month at West Quay Road, Southampton.


”The addition of marine products to our existing car franchise in Southampton is an important milestone for us,‘‘ said Hendy Group managing director Paul Hendy. ”To be awarded such a prestigious marine franchise is testament to our expertise, reputation and innovative approach to business.”


Heading the new operation will be marine expert John Donnelly. With more than 20 years‘ experience of


Honda Marine, he has successfully raced powerboats, run Honda powerboat series, developed engines and been involved in all aspects of sales and support.


”This is a wonderful opportunity for me to work with a well- established name and on such a great product range,” he added. ”Honda has a loyal customer base in the south and we‘ll be looking to build on that in the future.”


The new Southampton showroom will be designed to make watersports accessible to more people within the boutique environment offering a relaxed way to browse cars and marine products.


”The cars and marine products complement each other and we believe that customers of Honda cars will love the marine side and vice versa,” concluded Donnelly.


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – APRIL 2013


”The Cox Report provides policymakers with a range of ways in which these short-term pressures can be addressed,” said Munson. ”The report is right to identify equity markets as a key source of short-termist pressure for quoted companies, and to make the case for measures that incentivise equity investors to become more engaged, committed company owners. The advocacy of an end to mandatory quarterly reporting and a more long-term approach to executive pay policy is particularly welcome.”


Business THE TM MAGAZINE:DIGITAL


Read these stories in full in the current issue of


The Business Magazine:Digital at www.businessmag.co.uk


Reading set for landmark college


UTC Reading, the new university technical college specialising in science and engineering for 14 to 19-year-olds is gearing up for a September opening . . .


Manufacturing in recovery


Business adviser David Taylor, who works with James Caan, the Dragon‘s Den entrepreneur, argues that the future of manufacturing looks promising . . .


Whatever happened to trust?


Trust and confidence in our economic and financial institutions has collapsed, warns Colin Mayer . . .


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