Vanguard’s CEO wants companies to think long-term

Bill McNabb
Bill McNabb

TREDYFFRIN >> As he leaves his position as CEO of Vanguard, Bill McNabb is becoming involved in an organization that encourages American corporations to take a long-term approach to running their organizations.

McNabb, who on Jan. 1 will turn over the reins as CEO of the mutual fund giant to current Chief Investment Officer Tim Buckley, will join the board of directors of an organization called CECP: The CEO Force for Good. He also will serve as co-chair of that organization’s Strategic Investor Initiative as well continue at Vanguard as its chairman.

“For too long, companies have sacrificed long-term value creation to generate short-term results, which erodes the sustainability strategic investors seek,” McNabb said in a statement. “It’s through the ground-breaking efforts of the Strategic Investor Initiative that companies and investors can change how businesses plan and act. CECP, with the 200 global CEOs in their coalition, is the right organization to lead this transformation.”

McNabb, who was unavailable for comment Wednesday, will begin work with the organization immediately. McNabb joined Vanguard in 1986, took on the role of chief executive officer in 2008, and became chairman of the board of directors and the boards of trustees in 2010. In the last seven years under McNabb’s leadership, Vanguard’s assets under management have increased from $1 trillion to more than $4.4 trillion.

Advertisement

CECP was founded in 1999 by actor and philanthropist Paul Newman to create a better world through business. It has grown to a movement of more than 200 of the world’s largest companies that represent $7 trillion in revenues, $18.6 billion in societal investment, 13 million employees, and $15 trillion in assets under management.

The CEO-led coalition believes that a company’s social strategy – how it engages with key stakeholders including employees, communities, investors, and customers – determines company success. Its Strategic Investor Initiative, or SII, is the CEO- and investor-backed platform designed to change the conversation between CEOs and their boards, directors and investors. It refers to the way many public companies operate as “short termism.”

Mark Tulay, director of the Strategic Investor Initiative, said the organization is lucky to have McNabb.

“We’re very excited to have Bill involved,” Tulay said in a phone interview Wednesday. ”What a fantastic person he is – what a caring soul.”

Another member of the organization said McNabb’s involvement will give it a boost.

“Vanguard has been at the forefront of the long-termism movement,” said Doug Conant, founder and CEO of ConantLeadership who also is former CEO of Campbell Soup Co. “Without question, Bill McNabb’s increased involvement in and leadership of SII and CECP as a whole will enhance our ability to shift trillions of dollars of investor capital, rewarding companies that recognize and demonstrate that long-term planning provides the context for short-term actions.”

Other CEOs and leaders on the two CECP boards include those from BD, BlackRock, Breckinridge Capital Advisors, CalSTRS, CDPQ, Cornerstone Capital Inc., Hermes EOS, Heron Foundation, HSBC, KPMG, Merck, NASDAQ, Newman’s Own, New York State Office of the Comptroller, Neuberger Berman, Nielsen, PwC, State Street Global Exchange, Thomson Reuters, Walmart, Welltower and Voya.

– To contact Business Writer Brian McCullough, call 610-235-2655 or send an email to bmccullough@21st-centurymedia.com.