ARLINGTON, VA June 7, 2018 -- The National Association of Corporate Directors (NACD) today issued the following statement from President and CEO Peter Gleason on the Business Roundtable’s announcement that it supports "companies moving away from an expectation of providing quarterly earnings per share guidance and potentially dropping such in the future."
"NACD, representing more than 19,000 corporate board members, applauds the CEOs of the Business Roundtable for embracing the move away from quarterly earnings guidance. Beginning with the 2015 Report of the NACD Blue Ribbon Commission: The Board and Long-Term Value Creation, our organization has long called for moving away from quarterly reporting because doing so can foster a culture of focusing only on short-term results, versus the long-term value creation that corporate boards and management should be focused on. This challenge is underscored by NACD's 2017 survey of more than 500 public company boards. The survey results revealed that short-term performance pressure continues to be acutely felt by boards and management teams, with nearly three-quarters (74%) of respondents reporting that management's focus on long-term strategic goals has been compromised by pressure to deliver short-term results. NACD joins the Business Roundtable in supporting companies' efforts to move away from this practice and instead devote their attention to the long-term growth of their companies and the economy as a whole."
The National Association of Corporate Directors (NACD) empowers more than 19,000 directors to lead with confidence in the boardroom. As the recognized authority on leading boardroom practices, NACD helps boards strengthen investor trust and public confidence by ensuring that today’s directors are well prepared for tomorrow’s challenges. World-class boards join NACD to elevate performance, gain foresight, and instill confidence. Fostering collaboration among directors, investors, and corporate governance stakeholders, NACD has been setting the standard for responsible board leadership for 40 years. To learn more about NACD, visit www.NACDonline.org.