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Is Short-Term Behavior Jeopardizing the Future Prosperity of Business? (CLO Strategic Implications)
October 2015 | Publication
Two trends are in line with the expected impact of short-termism at a public company level—a reduction in business investment and an increase in payouts to shareholders. Governance experts, economists, and shareholders themselves are raising concerns with these trends, saying many companies are ransoming future prosperity for higher returns today. The Conference Board Governance Center, which has been studying this issue for more than a decade, believes the future strength of public companies rests on a return to a more balanced approach. Chief legal officers are in a unique position to review the governance structures of their companies to determine whether any changes could better balance the demands for short- and longer-term performance.