When CEO Lack of Foresight Hurts Financial Performance
(3BL Media / theCSRfeed) October 4, 2011 - CEO tenure over the last 20 years has reduced by more than 50 percent. So it should come as no surprise that short-term focus is undermining companies' long-term performance and stakeholder relationships.
New research reveals that shorter CEO decision horizons create additional investment costs. A lack of future growth opportunities for the company may lead executives to participate in self-serving investments. CEOs also tend to manage corporate earnings with the goal of raising stock prices and securing seats on corporate boards, leading to a reduction in the quality of information investors receive about earnings and cash flows.
Read the Research Insight to discover helpful solutions to keep your CEO focused on the future.
The Network for Business Sustainability is a not-for-profit organization that connects business leaders and academic experts worldwide to devise new business models for the 21st century. NBS is located at the Richard Ivey School of Business (at The University of Western Ontario) in London, Canada and at the Université du Québec à Montréal. NBS is funded primarily by Canada’s Social Sciences and Humanities Research Council, with additional support from industry partners.
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