A central tenet of the Business Roundtable Principles of Corporate Governance is that public companies should be managed with a dedicated focus on creating long-term economic value for shareholders, workers, families and communities. Increasingly, many CEOs and boards of directors today face short-term pressures, often related to meeting short-term earnings forecasts or living up to analyst expectations. These pressures can lead to an undue focus on short-term profits at the expense of strategic investments needed for long-term growth and value creation.
Business Roundtable CEOs believe that allowing management to focus on growing the business and creating more long-term value for shareholders will ultimately increase living standards, expand economic opportunities for Americans and create more room for social improvement. One key way that the Roundtable is working to promote greater focus on long-term value creation is by encouraging public companies to consider moving away from providing quarterly earnings per share guidance.