Confronting short-termism: embedding a forward thinking boardroom culture based on the provision of strategic direction

Short-termism is based in the demand by market agents for constantly improving quarterly earnings performance and its reflection in share prices. Management have responded with strategies to maximise earnings in the short-term, often by delaying or forgoing value-creating investments at the expense of long-term value creation and continuing shareholders’ interests. So significant and potentially damaging are the demands of short-termism to the long-term viability of organisations there are calls for reform to board leadership seeking boards to put the long-term interests of the organisation at the forefront of the their concerns.