A recent report by the Aspen Institute [PDF] suggests a big part of the problem with corporations’ focus on the short term is shareholders themselves. Today’s shareholders are relentless in demanding that executives “maximize shareholder value.” Shareholder value, in turn, is typically measure by share price — meaning share price today, not share price next week or next decade. This narrow focus on raising stock price by any means possible keeps companies from making long-term investments, protecting the interests of essential stakeholders like employees or customers, or taking much account of social welfare and ethical considerations in making business decisions.
Three Strategies for Long-Term Value
A recent report by the Aspen Institute [PDF] suggests a big part of the problem with corporations’ focus on the short term is shareholders themselves. Today’s shareholders are relentless in demanding that executives “maximize shareholder value.” Shareholder value, in turn, is typically measure by share price — meaning share price today, not share price next […]
October 19, 2011
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New!
HBR Learning
Leading People Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Leading People. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
What you need to know about being in charge.