In an side bar email exchange with a fellow discussant from Paul Barnett's Strategic Management Bureau discussion group, I focused on cash flow as the natural language of enterprise leadership.
A moment's reflection will show that cash flow is, or should also be, the natural language of pensions and other stewards of evergreen trusts. A pension, after all, is really an enterprise in its own right. A not-for-profit enterprise, to be sure, but still an enterprise. Its business is to generate cash flows from a combination of plan contributions and investment earnings to support benefit payouts and its own operating expenses. This is all about cash flow. We call the pension trust evergreen because it is chartered to keep this ongoing.
In an evergreen investing scenario, the direct connection between enterprise leaders and stewardship investors will be eased and facilitated by the fact that the investment is constructed in the native tongues of both enterprise and investment, the language of cash flow.
Compare this to the current situation, where enterprise is funded through the Exchange, and investment is directed into enterprise indirectly, through the Exchange (or some private alternative valuation mechanism).
In this Exchange-funded paradigm, even though both enterprise and investment speak the same language, naturally, each is artificially compelled to communicate to the other only indirectly, and in the foreign language of speculation on valuations, using the Exchange as their connector and interpreter.
Another reason why, after getting over the initial culture shock of exiting their current network of peers and colleagues who all speak the language of valuations, pensions and other stewards of evergreen trusts that adopt an evergreen investment paradigm will soon settle into a comfortable routine of speaking with sponsored enterprises in their own, shared native tongue of cash flow.