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I was the moderator for a discussion with Bill McNabb, CEO of Vanguard, the giant money manager, yesterday at the CEO Investor Forum organized by the Committee Encouraging Corporate Philanthropy (CECP), the CEO Force for Good. McNabb and Alex Gorsky, CEO of Johnson & Johnson, are co-chairs of the Strategic Investor Initiative, trying to move institutions toward a longer-term investment horizon. There were also presentations by Emma Walmsley, CEO of GSK, and Mauricio Gutierrez, CEO of NRG. Here are the important points from yesterday morning:

1. Get Rid of Earnings Estimates — The guidance provided by CFOs is used by traders to buy or sell shares. It is causing much more volatility than is warranted. The problem is not so much the quarterly reporting, according to McNabb, as the fact that it is baked into the system.
2. Long-Term Financial Plan — Vanguard’s average holding of a stock is 10 years. McNabb is interested in how a company is going to cope with new environmental regulations, possible trade wars or competition in developing markets. A company should release its long-term plan, then have an annual progress report for investors.
3. Activist Investors Have a Role — Every company should think about how an activist would come in. Gutierrez had a hedge fund in his first months as CEO. Now NRG is focused on consumer marketing, not the generation of energy. 
4. 15 Groups Pushing for Change — There is serious momentum behind long-term investing. The Coalition for Inclusive Capitalism, the GRI, Focusing Capital on the Long Term are among the important groups. Then there are the groups focused on sustainable investing, such as JUST Capital, which are separate but related.
5. The Long-Term Plan Generates Investor Interest — I saw Walmsley present the GSK growth pillars to a group of investors. They were especially interested in her notion of step change investing into her Rx and Vaccine units, her focus on employees attracted to GSK to solve global health issues, and her partnership with technology companies to transform her scientific discovery process.

Meanwhile, I was approached by the Aspen Institute, which seeks to restore trust in business as a means of cooling the populist fever. Judy Samuelson of Aspen noted in our meeting that “maximizing shareholder value is the primary reason that wages have stagnated, benefits have eroded and income inequality has exploded.” She went on to say that the top-down approach of persuading institutions to change their investing behavior is only part of the solution. Her idea is simple: focus on the nearly 19,000 MBA students who will be the future leaders of corporations. 

Under the banner of Share the Prosperity, Samuelson will be launching a site that gives the MBAs the tools for a call-to-action. She wants the students to challenge their faculty to teach stakeholder capitalism. She believes that there should be case work on PepsiCo’s Performance with Purpose, Starbucks’ Ethical Sourcing, PwC’s CEO Action for Diversity & Inclusion and Unilever’s Sustainable Living Plan. She cited a UN study that indicates that a third of business school students would sacrifice one-third or more of their future salary to work for a company that is ethical, sustainable and community-oriented. 

The Dow Jones Index hit a new high today. But the average increase in wages for a middle-class worker is only 11 percent since 1979. The pressure on consumer products companies from activist investors is forcing reductions in R&D and marketing, increasing margins but precluding future growth. The number of public companies has been cut in half in the past decade, from 8,000 to 4,000, as private equity has made strategic change more feasible. According to McNabb, there is strong evidence of better returns from long-term investment than short-term stock picking. CCOs should play an important role in this pivot to long-term investing as core to employee retention, community relations and corporate reputation.

Richard ������Ƶ is president and CEO.