Long-term value creation—the board's new agenda.
A big shift in public ownership has created a new set of challenges for
boards. Index funds managed by firms like Vanguard, BlackRock, and State
Street represent an emerging class of permanent institutional investors
who are focused on creating and preserving long-term corporate value.
These investors are stating in no uncertain terms that simply managing
for short-term shareholder profit is not acceptable.
Bill McNabb, Ram Charan, and Dennis Carey have been on the front lines
of these changes with the investment community, corporate boards, and
top-level management teams. Since TSR (total shareholder return) cannot
keep the short and long term in balance, the authors argue, boards
should focus on a different kind of TSR—talent, strategy, and
risk—because decisions and actions around these factors, more than any
others, determine whether or not a company creates long-term value. This
book redefines the board's agenda and explains how to:
- Build and incentivize the right leadership team
- Help leaders take a longer view and communicate it to investors
- Refresh board composition and create diversity to meet the new
challenges
- Keep major risks, such as cyberattacks and sexual harassment
allegations, front and center
- Analyze the business through the eyes of a shareholder activist
With the new realities of corporate ownership, boards need to lead for
the long term. This authoritative book shows them how.
