The Heisenberg Principle
"Corporate managements obey the Heisenberg uncertainty principle.
Like sub-atomic particles, they behave differently when observed."

378KB

The Heisenberg Principle provides that a watched particle is different than one that is not watched. In the same way, a corporate management that is watched -- in our opinion -- behaves differently than one without monitoring. When you have effective shareholders who are knowledgeable and who have incentive in order to watch what their management is doing you're going to get a different result.

Now, with the operation of our funds -- the Lens fund in this country, the Focus funds in the United Kingdom, we have demonstrated over a long period that we're able to perform better than the indexes -- by investing in companies in which we also take a monitoring role. This is very intuitive, I mean after all, you would think that people do better when somebody is making them be accountable. I can't say that this is a very popular position with corporate managements... but on the side of investors -- investors have everything to gain and nothing to lose by being activist.

Related info

• The Basic Principle of Governance “The Heisenberg Principle” - Henley, UK (Power Point Presentation)
• Shareholder Activism Adds Value
• The Need for Shareholder Activism: Value Added and Legitimacy
• LENS vs. S&P 500 - Eight Year Period
• Company Directors - Whom Do The Serve?
• Relationship Investing
• Power & Accountability

• Director Screening Tool

• Lens
• Hermes Lens Asset Management