The article in the url below argues that firms are currently ill-served by the stock markets and managers that craft strategies designed to maximize short term share price are doomed to fail. As a result, the authors recommend six actions that CEOs should take to “decouple their long-run strategies from the short-run vagaries of financial markets”:
“• Jettison quarterly guidance.
• Reduce dependence on external capital.
• Focus on individual and not institutional investors.
• Rethink compensation.
• Innovate via adjacencies rather than breakthroughs.
• Invest and acquire countercyclically.”
The authors outline their arguments for each recommendation. Many of the ideas seem intuitive in terms of strategic CSR. Taken together, however, they present a compelling case for change to a long term perspective in forming strategy and managing day-to-day operations.
Take care
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
CEOs, it is time to decouple from financial markets; Long-term strategy should be divorced from the vagaries of the share price
Govindarajan, Vijay Sundaram, Anant
832 words
21 April 2009
Financial Times
London Ed1
14
http://www.ft.com/cms/s/0/6d6f36c0-2da1-11de-9eba-00144feabdc0.html
or
http://readingpad.blogspot.com/2009/04/ceos-it-is-time-to-decouple-from.html
