Sample Long-Term-Oriented Performance Metrics

As the Report of the NACD Blue Ribbon Commission Report on Performance Metrics notes,

Sustainable corporate growth, by definition, cannot develop without careful coordination between strategy and the company’s short- and long-term goals. While boards must oversee both sets of goals, they should place their attention on long-term performance. When approving metrics for managers, directors must consider the implications of management’s actions on the  long-term corporate strategy.

There is no one-size-fits-all way to measure performance: in addition to strategic considerations, each company will select a combination of metrics best suited to its industry, life-cycle stage, and business model and will utilize external benchmarks as relevant. The following list includes examples of long-term-oriented performance metrics—which could include analysis of changes in short-term measures over a period of time—in nine different categories. While the list is not intended to be comprehensive or exhaustive, board members can use it as a reference in discussions with fellow directors and with management.  Some metrics might be most appropriate for discussions at the committee level, e.g. audit, compensation, finance, health and safety, and so on.