How to Navigate Competing Short- and Long-Term Pressures

Balancing conflicting pressures can be difficult amid uncertainty. Here’s why directors should remain focused on the long term.

Every director has been in a boardroom where the tension between quarterly expectations and long-term value creation feels impossible to resolve.

Board members must ensure that the companies they serve deliver on short-term metrics; both customers and investors depend on it. But their fiduciary duties require those short-term targets to serve as deliberate mile markers on the path to long-term value creation.

So, what makes some boards better at navigating this balance? What distinguishes the companies that earn higher Long-Term Stock Exchange (LTSE) Long-Term Company Ratings^SM and demonstrate greater long-term value creation over time from their peers?

A Framework for Resilience

Decades of research point to five principles that enable companies to consistently create long-term value. LTSE has codified the following principles into a framework that is adopted by companies that list on its exchange:

1. Stakeholders. Long-term-focused companies should consider a broader group of stakeholders and the critical role they play in one another’s success.
2. Strategy. Long-term-focused companies should measure success in years and decades, and prioritize long-term decision-making.
3. Compensation. Long-term-focused companies should align executive compensation and board compensation with long-term performance.
4. Governance. Boards of long-term-focused companies should be engaged in and have explicit oversight of long-term strategy.
5. Investors. Long-term-focused companies should engage with their long-term shareholders.

In collaboration with Corporate Board Member, the Long-Term Stock Exchange conducted a survey of nearly 100 CEOs and board members from publicly traded companies. Participants were assessed according to their companies' LTSE Long-Term Company Rating^SM, a scoring model that draws on 16 indicators from independent evaluations and direct company practices tied to long-term strategy and stakeholder commitment. Ratings range from 0–100, yet only 10 to 15 percent of companies earn scores in the moderate to high range.

Higher Confidence Levels

How confident are you in your organization's ability to remain competitive over the next three to five years?

Source: Corporate Board Member and Long-Term Stock Exchange

The three-to-five–year confidence gap was striking: Respondents at public companies with moderate to high LTSE ratings marked their confidence in their competitive outlooks at 7.3 out of 10, compared to just 6.7 for those at companies with low LTSE ratings. This confidence advantage reflects fundamentally different approaches to board oversight and strategic decision-making.

“AI and IT innovation [create] the potential for unexpected competitive disruption, making future market dynamics difficult to predict,” said one respondent from a high-scoring public company, who still rated his or her confidence at 8 out of 10 due to the business’s strong five-year vision.

In contrast, a respondent from a low-scoring public company tied his or her confidence directly to the strength of the company’s portfolio and its financing needs and noted, “[It] all depends on our ability to get financing. Given the portfolio, I would have been much more optimistic, but given the market and geopolitical uncertainty, the best I can do is a 5.”    

Why These Findings Matter

This confidence gap underscores more than a difference in optimism; it reflects fundamentally different governance mindsets. Leaders at higher-rated companies draw confidence from disciplined long-term planning and a clearly articulated vision, which enables them to face uncertainty with resilience. By contrast, leaders at lower-rated companies are more reactive, with their confidence levels heavily tied to external conditions, such as financing or market volatility.

This divergence suggests that long-term alignment doesn’t just influence what boards focus on; it also shapes how they approach competitiveness and risk. Boards with strong, long-term governance frameworks are better equipped to steer their organizations during volatility and guide them toward durable value creation.

Different Risk Oversight Approaches

While all companies face similar economic pressures, those focused on long-term value creation identify and prioritize risks through a different governance lens. Respondents overseeing companies with moderate to high LTSE ratings were more than three times likelier than those overseeing companies with low ratings to cite geopolitical risk as a top concern (30 percent versus 8 percent).

This suggests that boardroom conversations extend beyond immediate operational or financial pressures and instead probe deeper to ask how systemic forces, such as global conflicts, supply chain volatility, or disruptive technologies, might reshape the company’s position over the next decade. These directors approach risk with a strategic mindset, linking today’s challenges to long-term implications and debating how governance, capital allocation, and innovation should adapt.

“From a risk management perspective, maintaining a consistent, long-term strategic focus actually helps boards reduce their exposure to shareholder litigation,” said Priya Cherian Huskins, a partner, senior vice president, and board member at Woodruff-Sawyer & Co., as well as a board member for Realty Income Corp., National Mortgage Insurance Corp., and the LTSE Group.

What do you see as the greatest short-term pressure on your company today?

Note: Totals in the chart may exceed 100 percent because respondents could choose more than one response.

Source: Corporate Board Member and Long-Term Stock Exchange

In contrast, companies that lack long-term alignment concentrate on immediate operational challenges, with 19 percent of respondents from low-rated companies emphasizing cost pressures and inflation compared to just 11 percent of their higher rated and strategically focused peers.

“Directors who can demonstrate they've made decisions based on a clear, well-articulated long-term strategy, rather than reacting to quarterly pressures, are able to mount a stronger defense against claims of breach of fiduciary duty than directors who are merely reacting to quarterly pressures,” Huskins said. “The governance discipline required for long-term value creation, robust oversight processes, documented strategic rationale, and stakeholder consideration naturally creates the kind of decision-making record that withstands scrutiny.”

These risk perspectives shape where board members focus their oversight. "Don't let the short-term demands overtake the more important, strategic, and mid to long-term investments and focus," one director from a high-scoring company wrote.

Directors’ Responsibilities

When directors and management link quarterly results to a company's five- or 10-year strategy, they can build more compelling narratives that show deliberate progress on the path to sustainable growth.

Discipline is central to effective governance and long-term strategy. Boards that clearly establish success metrics and outline their approach to oversight are better equipped to steer companies toward sustainable, long-term value creation. Accountability for achieving that vision can be measured in both the short and long term, for example, by tracking near-term financial performance alongside indicators such as capital investment, innovation, stakeholder engagement, and progress toward strategic milestones.

The most resilient companies design governance systems where boards, executives, investors, and employees stay coordinated on shared values and a forward-looking vision, particularly when navigating periods of volatility. Ultimately, the choice to champion enduring value creation over short-term appeasement in every boardroom discussion and strategic decision rests with board members.

The views expressed in this article are the authors’ own and do not represent the perspective of NACD.

LTSE Group is a NACD partner, providing directors with critical and timely information, and perspectives. LTSE Group is a financial supporter of the NACD.