Investeurs Chronicle marks its 100th volume. On this 100th volume the time has come to reflect on this centuries generation of leaders, thinkers, and makers. These people, their companies, and their ideas have shaped the future we live in today. In this edition we've gathered information on Corporates Longevity. Companies that survive 100 years or longer are "a special and rarefied group." So what is the key to their Longevity? Read more……

1. Volume: 100

2. The past few years have seen previously unthinkable corporate behemoths - from financial firms such as Lehman Brothers to iconic car manufacturers such as Saab - felled by economic turmoil or by unforgiving customers and tough rivals. And do not put away the black garb yet - the pace of corporate funerals is set to pick up.
The average lifespan of a company listed in the S&P 500 index of leading US companies has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today, according to Professor Richard Foster from Yale University. Today's rate of change "is at a faster pace than ever", he says. Professor Foster estimates that by 2020, more than three-quarters of the S&P 500 will be companies that we have not heard of yet.
In the world of institutions, commercial corporations are newcomers. Their history comprises only 500 years of activity in the Western world, a tiny fraction of the time span of human civilization. In that time, as producers of material wealth, they have had immense success. They have been the major vehicle for sustaining the exploding world population with goods and services that make civilized life possible. In the years ahead, as developing countries expand their standards of living, corporations will be more needed than ever. Yet, if you look at them in the light of their potential, most commercial corporations are dramatic failures-or, at best, underachievers. They exist at a primitive stage of evolution; they develop and exploit only a fraction of their potential. For proof, you need only consider their high mortality rate. The average life expectancy of a multinational corporation-Fortune 500 or its equivalent-is between 40 and 50 years. This figure is based on most surveys of corporate births and deaths. A full one-third of the companies listed in the 1970 Fortune 500, for instance, had vanished by 1983-acquired, merged, or broken to pieces.
It is perhaps unsurprising that the country where people live the longest is also home to some of the oldest companies in the world.
In Japan, there are more than 20,000 companies that are more than 100 years old, with a handful that are more than 1,000 years old, according to credit rating agency Tokyo Shoko Research. There is even a specific word for long-lived companies in Japanese: shinise.
The list includes Nissiyama Onsen Keiunkan, a hotel founded in 705, which is thought to be the oldest company in the world.
Longevity is, of course, a relative term. Autenrieder, a German brewery, is the oldest-known commercial establishment, having been founded in 1650, the same year in which Japan’s two longest-living, sake-makers Kaganoi and Yukawa were founded. The Dutch porcelain maker Royal Delft was established a few years later in 1653. America, too, has its share of 300-plus-year-old entities. Shirley Plantation the oldest active plantation in Virginia and one of the oldest family-owned businesses in North America dates back to 1614.
In terms of oldest continuously operated businesses, the U.S. can cite Cigna (1792), State Street (1795), Crane & Co. (1801), DuPont (1802), Colgate (1806) and many more
The Secrets of Corporate Longevity
What accounts for these impressive lifespans? Achieving this degree of longevity “doesn’t happen by accident,” answers Mary Kier, CEO of Chicago-based search firm Cook Associates, who has written extensively on the subject. “It happens to companies that have character. It happens when owners or CEOs or chairmen know how to keep their composure, even in times of economic crisis, and how to invest their money wisely to sustain the long term. It happens when employees feel it is their company, too. They do what’s right all the time. If they do that, they have a better chance of longevity and sustainability.”
Business of Survival - Corporate Longevity

3. One of the keys at large, publicly traded companies like General Electric, Kier says, is the practice of identifying and grooming high-potential managers from within. “CEOs come from within and stay a long time,” she says. These annual systems of evaluating high potentials, also seen at Johnson & Johnson, IBM and other top public companies, are essential to building in durability for the company as a whole. “If you know that your future is well planned out and you are part of that planning, it certainly is going to be a sustaining factor,” Kier concludes.
Second comes the successful amalgamation of the best of family run or Private managed Companies and its listed counterparts. Michael E. Werner, president and CEO of the North American division of Taiwan-based Globe Union Group, a $700 million a year, publicly traded maker of plumbing equipment, argues that the companies with the best shot at longevity manage to combine the best family values with the realities of having at least some shares traded publicly.
“I’m a firm believer that if a senior-management team thinks about the future and about stewardship, almost doing it with a servant type of mentality, the company will prosper for a long time,” says Werner. “The best case is when you can couple that with the high-performance expectations of a public company. We want to combine the best of both worlds. In a public company, you can’t become complacent because you’ve always got people looking over your shoulder challenging you.”
Third and perhaps the most crucial factor is to remember the true nature of an organization. Arie de Geus, the father of scenario planning when he was the coordinator of planning for the Royal Dutch/ Shell Group, posits that it is because they focus on more than just the economic activity of producing goods and services. Specifically, he says that those that fail to endure "...forget that their organization’s true nature is that of a community of humans". A company is a legal fiction; any organization is a collective of people and the internal challenge is aligning interests. The external perspective requires a sound understanding of an ever-changing world. The Shell researchers looked at companies that were older than Shell (founded in the 1890s), that were at least as important in their respective industries and that had weathered some profound changes in the world around them. From 40 such companies they narrowed the list down to 27 that were studied in detail.
From this list, they found 4 key factors to corporate longevity:
Being sensitive to their environment: They kept their corporate radar attuned to subtle, and not so subtle, changes going on around them. This is all the more impressive given the lack of communications technology that was available for the greater part of these companies' lives.
Having internal cohesiveness and a strong sense of identity: No matter the diversification or spread, employees and suppliers alike felt they were all part of one entity. There was a sense of belonging to the organisation and being able to identify with its achievements. Career advancement and progression was from within and management's concern was for the health of the institution as a whole. In this way, the leaders, acted as trustees or custodians rather than simply managers.
Tolerance: It seemed the long-lived companies avoided exercising centralised control. Note that the management-speak word 'decentralised' was a twentieth century invention. The companies were tolerant of activity at the margin, such as outliers and experiments that stretched the thinking. Today, we would classify this third horizon activity as buying options for the future.
Conservative financing: Frugality and the avoidance of risk were paramount. Having cash in the bank not only de-risked the enterprises but gave them flexibility and an ability to act independently of what others might have been forced into doing. The options referred to above could be funded from within and pursued with patience.

4. No doubt there were, in each company's case, many more factors that contributed to their longevity. One such factor which comes to mind is emphasis on innovation and reinvention. Take Berkshire Hathaway, which began as a textile mill in Rhode Island. In fact, the world's oldest limited liability corporation, the Finnish paper and pulp manufacturer Stora Enso, first started out as a copper mining company in 1288. Innovation in general is not always easy, however, especially for publicly listed companies that must balance the concerns of capital markets and shareholders, who demand quarterly profits and who are not necessarily interested in decades-long research projects.
When to Die
Yet even if a company can innovate and conditions do remain favourable, immortality does have its downsides. For instance, there is no real proof that age makes a company any more profitable than younger companies. On the contrary, evidence from the stock market actually suggests that age could be a hindrance. Of the 74 or so companies that have stayed in the S&P 500 for more than 40 years, only a dozen or so have managed to beat the average, according to a study by consultancy McKinsey. In fact, if the S&P 500 were made up of only the companies that were part of the index in 1957, overall performance would have been some 20% worse.
Conclusion
There is accumulating evidence that corporations fail because the prevailing thinking and language of management are too narrowly based on the prevailing thinking and language of economics. To put it another way: Companies die because their managers focus on the economic activity of producing goods and services and they forget that their organizations' true nature is that of a community of humans. The legal establishment, business educators, and the financial community all join them in this mistake.
Longevity seems to have anything to do with a company's material assets, its particular industry or product line, or its country of origin. Indeed, the 40- to 50-year life expectancy seems to be equally valid in countries as wide apart as the United States, Europe, and Japan, and in industries ranging from manufacturing to retailing to financial services to agriculture to energy.
These Companies have paid dividends for over 100 years
These companies have managed to pay distributions through two world wars, the cold war, several oil price shocks and countless recessions. Their strong business models have helped them to consistently find new ways to increase sales, pass on cost increases to consumers and gain market share that has resulted in higher profits and dividends over the past century.
1)International Business Machines Corporation- The Company has raised dividends for 18 years in a row, and has consistently paid them since 1913.
2)Exxon Mobil Corporation- This dividend champion has raised dividends for 31 years in a row, and has consistently paid them since 1911.
3)The Bank of Nova Scotia - The Company has paid dividends since 1892, maintained its distributions during the crisis of 2007 -2009 and has been boosting them again over the past few years.
4)Edison International- The Company has raised dividends for 11 years in a row, and has consistently paid them since 1910.
An honorable mention goes to Kellogg, which has paid dividends for almost 90 years in a row, and has a listing of all the payments since 1925. Kellogg has also raised dividends for 9 years in a row.

5. Century Old Indian Companies
Two World Wars, the Great Depression, India's independence struggle, the Hindu rate of growth, the licence-permit raj, controls on foreign exchange and expansion, and the reforms of the 1990s: a handful of Indian companies have seen it all, and adapted along the way to do well. India has around three dozen century-old companies that are listed and still actively traded. Some of them are:
Bennett , Coleman & Co.
Britannia
Century Textile & Industries
CESC
Dabur
The Global 100 Most Sustainable Corporations
Innovest Strategic Value Advisors has pulled together a list of 100 stalwart companies poised to survive past all others. These are the companies that stand the best chance to still be around in the year 2109.
Company Name
Country
Sector
Acciona SA
Spain
Construction
Accor
France
Consumer Goods
Adidas AG
Germany
Consumer Goods
Advanced Micro Devices
USA
Computers/Electronics
Aeon Company Limited
Japan
Retail
Air France-KLM
France
Transportation
Alcoa Inc
USA
Extractives
Amazon.com Inc
USA
Retail
Atlantia
Italy
Transportation
Atlas Copco AB
Sweden
Industrials/Capital Goods
BASF SE
Germany
Chemicals
Baxter International Inc
USA
Health Care
BG Group PLC
UK
Oil & Gas
BHP Billiton PLC
UK
Extractives
Godrej & Boyce
ITC
Shalimar Paints
Kirloskar Brothers
Tata Steel
TVS
Indian Hotels
British Land Company PLC
UK
Real Estate
British Sky Broadcasting Group PLC
UK
Media
Cable & Wireless PLC
UK
Telecom & IT
Cairn Energy PLC
UK
Oil & Gas
Centrica PLC
UK
Utilities
Coca Cola Company
USA
Consumer Goods
Credit Agricole SA
France
Banks
Daikin Industries Limited
Japan
Construction
Dell Inc
USA
Computers/Electronics
Deutsche Boerse AG
Germany
Diversified Financials
Dexus Property Group
Australia
Real Estate
Diageo PLC
UK
Consumer Goods
East Japan Railway Company
Japan
Transportation
Eastman Kodak Company
USA
Consumer Goods
Encana Corp.
Canada
Oil & Gas
Ericsson Telephone AB
Sweden
Computers/Electronics
FPL Group Inc
USA
Utilities
Fresenius Medical Care AG
Germany
Health Care
Geberit
Switzerland
Construction

6. Ericsson Telephone AB
Sweden
Computers/Electronics
FPL Group Inc
USA
Utilities
Fresenius Medical Care AG
Germany
Health Care
Geberit
Switzerland
Construction
Genzyme Corp.
USA
Health Care
Glaxosmithkline PLC
UK
Health Care
Goldman Sachs Group Inc
USA
Diversified Financials
Groupe Danone
France
Consumer Goods
H & M Hennes & Mauritz AB
Sweden
Retail
Hewlett-Packard Company
USA
Computers/Electronics
Hochtief AG
Germany
Construction
Honda Motor Company Limited
Japan
Industrials/Capital Goods
Iberdrola SA
Spain
Utilities
Inditex SA
Spain
Retail
Intel Corp.
USA
Computers/Electronics
Kesko OYJ
Finland
Retail
Kuraray Company Limited
Japan
Chemicals
Lafarge SA
France
Construction
Land Securities Group PLC
UK
Real Estate
Lend Lease Corp. Limited
Australia
Real Estate
London Stock Exchange Group PLC
UK
Diversified Financials
Lonmin PLC
UK
Extractives
L’Oreal
France
Consumer Goods
Michelin
France
Industrials/Capital Goods
Mitsubishi Heavy Industries Limited
Japan
Industrials/Capital Goods
Muenchener Rueckversicherung AG
Germany
Insurance
Neste Oil OYJ
Finland
Oil & Gas
Nike Inc
USA
Consumer Goods
Nippon Yusen KK
Japan
Transportation
Nokia Corporation
Finland
Computers/Electronics
Novo Nordisk A/S
Denmark
Health Care
Novozymes A/S
Denmark
Chemicals
NTT Data Corp.
Japan
Telecom & IT
NTT Docomo Inc
Japan
Telecom & IT
Panasonic Corporation
Japan
Consumer Goods
PG & E Corp.
USA
Utilities
Pinnacle West Capital Corp.
USA
Utilities
Procter & Gamble Company
USA
Consumer Goods
Prologis
USA
Real Estate
Prudential PLC
UK
Insurance
Reed Elsevier PLC
UK
Media
Ricoh Company Limited
Japan
Computers/Electronics
Roche Holdings Limited
Switzerland
Health Care
Royal Bank Of Canada
Canada
Banks
Sainsbury (J) PLC
UK
Retail
Saint Gobain
France
Construction
Saipem
Italy
Oil & Gas
SAP AG
Germany
Telecom & IT
SCA AB
Sweden
Extractives
Scania AB
Sweden
Industrials/Capital Goods
Sekisui Chemical Company Ltd
Japan
Real Estate
Sims Group Limited
Australia
Extractives
Smith & Nephew PLC
UK
Health Care
Sompo Japan Insurance
Japan
Insurance
State Street Corp.
USA
Diversified Financials
Statoilhydro ASA
Norway
Oil & Gas
Stora Enso OYJ
Finland
Extractives
Swiss Reinsurance Company
Switzerland
Insurance
Telus Corp.
Canada
Telecom & IT
TNT NV
Netherlands
Transportation

7. The Capita Group PLC
UK
Business Services
The Walt Disney Company
USA
Media
TNT NV
Netherlands
Transportation
Toppan Printing Company Limited
Japan
Business Services
Toronto-Dominion Bank
Canada
Banks
Toyota Motor Corp.
Japan
Industrials/Capital Goods
Transcanada Corp.
Canada
Utilities
Unilever PLC
UK
Consumer Goods
United Technologies Corp.
USA
Transportation
Vestas Windsystems A/S
Denmark
Computers/Electronics
Wartsila OYJ
Finland
Industrials/Capital Goods
Whitbread PLC
UK
Consumer Goods

8. About Investeurs Consulting Private Limited
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Team Chronicle
Akanksha Srivastava akanksha@investeurs.com
Nidhi Gogia nidhi@investeurs.com
Harpreet Kaur harpreet@investeurs.com
Disclaimer: Investeurs Chronicles is prepared by Research & Analysis Team of Investeurs Consulting Private Limited to provide the recipient with relevant information pertaining to the world economy. The information contained in the document is based on the releases made by various newspaper & publications; hence, we are not responsible for any inaccuracies in the information provided.