Getting companies to invest long-term
‘... unlike a factory which is easily visible to investors, the fruits of intangible investment take several years to appear. Thus, a manager pressured to maximize short-term earnings may underinvest in his company’s future. This problem of “managerial myopia” is well-known, but proposed solutions are typically piecemeal. Instead, the problem is holistic – it depends on how managers are paid, how shareholders evaluate companies, and how regulators mandate corporate disclosure.’
One evaluation framework for all boards?
‘To explore the differences and similarities between sectors when it comes to board improvement we recently conducted a survey of over 100 board members and then brought invited guests together to discuss the results. ... The headlines were pretty clear, whilst boards in the charity and public sector will have a different mission to a PLC board when it comes to their own operation: the setting of priorities, the way they make decisions, getting access to the right skills, and critically how they view their own performance improvement, there were far more similarities than differences.’