Indicators of Misalignment Between Long-Term and Short-Term Strategy

In brief: Under normal operations, it can be challenging to find the right balance between long-term and short-term strategic interests. In a crisis, finding the right balance is even more difficult, as competing demands and the nature of crisis management may make it seem necessary to keep the focus exclusively on the short term. This tool aims to help directors recognize and process warning signs that the board and management are favoring short-term strategy at the expense of longer-term company interests:

• Directors will gain a better understanding of signs from management that may indicate that the board’s actions are contributing to misalignment of the company’s long- and short-term strategies.
• Directors will find out how compensation practices can unintentionally favor short-term action on the part of management.
• Learn how to detect whether the company may be poised for an activist threat based on factors indicating the company is underperforming.

Most relevant audiences: Lead Director, Full Board