Is Short-Term Behavior Jeopardizing the Future Prosperity of Business?
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Authors:
Donna Dabney
Melissa Aguilar
Gad Levanon, PhD
Alex Parkinson
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Publication Date:
October 27, 2015
Managers of public companies are under constant pressure to meet quarterly guidance and maximize profits, often at the expense of future profitability. Those pressures—driven by activist hedge funds, executive compensation design, quarterly capitalism, and changes in capital markets—are likely to increase in the next 10 to 15 years. Business leaders should review their companies’ governance structures to see whether they should make modifications that could better serve long-term prospects. This report recommends actions they may want to consider, including governance changes that public companies (with investor support) and investors can make and tax changes the government can make. Explore our full portfolio of thought leadership on short-termism here.
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