Remove Cash Flow Remove Government Remove Metrics
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Reclaiming the Idea of Shareholder Value

Harvard Business

Corporate governance issues are constantly in the headlines. But discussions of corporate governance invariably miss the real problem: most public companies have extensive governance procedures but no governing objective. First, corporate boards must select a clear governing objective.

Cash Flow 122
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Is Corporate Short-Termism Really a Problem? The Jury’s Still Out

Harvard Business

If they do, as many CEOs believe, this is a serious indictment of current corporate governance arrangements and has important policy implications. It finds that companies that take a long-term view perform better on many metrics, such as employment growth and shareholder return. I am not sure what to believe in this area.

McKinsey 120
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How Incentives for Long-Term Management Backfire

Harvard Business

But one other big factor has been hiding in plain sight: The efforts of corporate-governance activists and proxy advisers, empowered by the “Say on Pay” votes mandated by Dodd-Frank reforms, to stress transparency and pay for performance. Eventually, the company’s share price nosedived.

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Financial Shenanigans Versus Incompetence

Martinka Consulting

We have a government with annual deficits of $1 trillion and with a lot more “off the books” because there are non-budget items. Tip to owners – one of the top three things you can do is have solid financial systems, accurate statements, good management reports, know your KPIs, and other metrics.

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Finally, Proof That Managing for the Long Term Pays Off

Harvard Business

After all, “short-termism” does not correspond to any single quantifiable metric. And isn’t the focus on quarterly results a natural outgrowth of the rigorous corporate governance that keeps executives accountable? With this metric, the gap between long-term companies and the rest is even bigger.

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Hussman's Open Letter to the Fed; The Problem with Bubbles; Textbook Pre-Crash Bubble; Reflections on Not Chasing Bubbles; Integrity vs. Respect

MishTalk

The fact that profits as a share of GDP are more than 70% above their historical norm should immediately raise a question as to whether current year earnings or next year’s projected “forward earnings” should be used as a sufficient statistic for long-term cash flows and equity market valuation without any further reflection.

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The Importance of Business Acumen for High Performance

LSA Global

It is not just the purview of finance to interpret the numbers that govern profit and loss; it behooves every employee to understand how and why the company makes money, spends money, and measures financial performance. Cash flow. To understand how one metric affects another, understand some common scenarios.