14 Pages Posted: 13 Mar 2012
Date Written: December 7, 2011
The current economic and political situation requires corporations and their boards to have bold visions for future growth with long-term investments, to make proactive efforts to modulate the pressures for short-term stock price increases and to take advantage of the valuable insights gained in navigating the worst recession since the 1930s. Many boards have been playing defense rather than offense these last few years, as tough economic conditions have prompted crisis management dilemmas, short-term survival strategies and other challenges. Boards have also been dealing with ever-increasing layers of corporate governance requirements and demands from activist shareholders that shift decision-making power from boards to shareholders. In addition, pressures for short-term increases in stock prices have been constant; Wall Street continues to be intensely preoccupied with quarterly earnings targets, which in turn has fostered an investor mindset that too often measures success on the basis of myopic benchmarks. In this environment, the need for boardroom resolve and commitment to long-term growth is critical not only for companies, but also for the vitality and competitiveness of American businesses in the global economy.
Suggested Citation: Suggested Citation
Lipton, Martin and Rosenblum, Steven A. and Cain, Karessa L., Some Thoughts for Boards of Directors in 2012 (December 7, 2011). Available at SSRN: https://ssrn.com/abstract=2020413 or http://dx.doi.org/10.2139/ssrn.2020413
By Kevin Murphy