The Institute of Internal Auditors with Scientific Accounting Association and Institute of Administrative Development held a seminar on Short term-ism.

Dr Khalid Al Khater Chairperson of SAA and Kurian Kuriakose, Managing Partner of Morison Menon Chartered Accountants LLC, Qatar, representing sponsor of the event were guests of honour. Prabhakar Kamath, a partner of Morison Menon was specially flown in from Dubai to speak at the seminar.

Kamath explained to the participants what short term-ism meant in the financial/corporate world and its effects. He also deliberated on what can be done to combat this menace of today's fast world.

Short term-ism refers to the excessive focus of some corporate leaders, investors, and analysts on short-term performance. This generally manifests in meeting quarterly earnings in the case of Corporate and quarterly fund performance in the case of Fund managers.

Short term-ism results in lack of attention to the long term strategies and long-term value creation. An excessive short-term focus combined with insufficient regard for long-term strategies can destroy value creation.

According to US National Bureau of Economic Research, a great number of corporate bosses prefer to delay starting a project with a positive net present value in order to avoid falling short of quarterly consensus earnings. This is the classic case of long term risk aversion, whereas any long term strategic value creation necessitates exposure to long term risk.

A Mckinsey survey of over 1,000 directors around the world found that more than half had only a limited understanding of where the company's long-term objectives would position it in five to ten years.

In case of Mutual Funds, a research shows that since the 1960s, the rate at which US mutual fund managers turn over their entire portfolio has quickened from, on average, once every five years to less than a year. The reason behind short term-ism is that society as a whole is fixated on instant gratification. Our habitual impatience and greed for getting what we want is the root cause of short term-ism.