For those who view active monitoring and engagement by shareholders as an effective tool in building long-term value, these are meaningful and helpful changes.
They are putting themselves under the control of small number of large holders; and in such a way that their holders' self-interest lies in building long-term value rather than in reaping immediate stockmarket gains.
If the fear is that, as a class, American business people who are focused on building long-term value will no longer be eager to serve as directors of public companies because of this modest increase in competition, our experience suggest that this outcome is unlikely.
When a top executive tells employees they need to "focus on our promised results," senior managers often interpret that as meaning "Do whatever it takes to meet investors' expectations". By losing sight of the connection between employee behavior and results, and failing to take advantage of learning opportunities, leaders miss out on building long-term value for their firms.
I'd much rather focus on building long-term value in building companies rather than worrying about exists.
The term unicorn, which he admitted to hating, helps mischaracterize companies, judging them by their capacity to fundraise rather than building long-term value.
In a letter that accompanied the latest IPO prospectus, Jack Ma told investors that he will put "customers first, employees second, and shareholders third". He also makes it clear that the company will ignore short-term profits and focus on building long-term value.
The company has also sent us a response: "Currently, the company is completely in the hands of private investors, which opens up new opportunities [our emphasis] for searching for partners interested in building long-term value of the portal and strengthening the position of NK.
There's good news, however: experts are taking a fresh look at the unintended consequences of "pay for performance" and experimenting with better strategies and protocols for building long-term value.
Do Activist Hedge Funds Really Create Long Term Value?
