For starters, companies should not manage earnings or provide earnings guidance those that fail to embrace this first principle of shareholder value will almost certainly be unable to follow the rest.Īdditionally, leaders should make strategic decisions and acquisitions and carry assets that maximize expected value, even if near-term earnings are negatively affected as a result. In this article, Alfred Rappaport offers ten basic principles to help executives create lasting shareholder value. It’s time to broaden that perspective and begin shaping business strategies in light of the competitive landscape, not the shareholder list. Executives have developed tunnel vision in their pursuit of shareholder value, focusing on short-term performance at the expense of investing in long-term growth.
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