The global financial crisis will force companies to rethink their investment goals and long-term market strategy, as bad strategic decisions taken before and during the market crisis have exposed and challenged core beliefs, according to several investment consultants and researchers at the Investment Management Consultants Association’s annual conference in Sydney.
Ian Patrick, the chief executive of JANA Investment Advisers, said those companies that understood their long-term strategy and outlook were handling the crisis better than those that didn’t know what investment strategy they were following.
Maintaining your relationship with your investors and keeping them engaged during a crisis was about holding the core investment beliefs that were frequently articulated to clients, Patrick said.
Hugh Dougherty, the head of manager research at Watson Wyatt, said companies needed better governance, and weak resources and poor beliefs lead to indecision when it comes to long-term goals.
Companies need to constantly re-examine their strategies and understand the potential conflicts of interest and risks if they want to cope better with a crisis, he added.
Companies needed to know what they were working towards, Dougherty said, and while clients were engaged with the market and investment scene, getting different clients in different parts of the world to follow the same “alignment”, or investment strategy, was difficult.
Jack Gray, the adjunct professor at the School of Finance and Economics at the University of Technology Sydney, said companies had to be aware of the problems of dangerous investing, but they also needed to act on that awareness by changing their investing behaviour.
