Who Holds the Long Clock

Abstract

Patient capital is usually described as a kind of money: a foundation's endowment, a family's holding, a pension fund's allocation to things that take decades. The twelve chapters before this one have treated it more precisely, and the precision changes what a reader can do with it. A company's time horizon is set by its purpose and its owners, as chapter 2 argued, and a purpose that is not written where it binds is a mood. The serious objections to purpose, chapter 3 showed, are each answered by a structure. Short-termism, in chapter 4's reading, is a mismatch between the clock a decision is judged on and the clock its assets renew on. The evidence in chapter 5, narrow but consistent, suggests that lengthening the clock through pay or ownership is associated with more long-cycle investment and greater durability. Chapters 6 and 7 showed foundations, trusts and founders doing it at scale, and chapter 8 showed listed companies doing part of it in their own reporting.