7 Questions Every CEO Should Be Able to Answer

7 Questions Every CEO Should Be Able to Answer

Do you provide enough long-term information to inspire investor confidence?

Do you provide enough long-term information to inspire investor confidence?

tweet me:
What are seven questions that CEOs must consider to think long-term and communicate this thinking to their investors? Brian Tomlinson, Research Director, Strategic Investor Initiative, @CECPtweets provides tangible guidance: https://bit.ly/2Rx6PcU
Tuesday, June 25, 2019 - 12:05pm

This article first appeared on The World Economic Forum. 

Companies are being asked by both investors and customers to better articulate their plans for making a profit and doing so in a way that doesn't damage the planet. These demands are taking on new urgency as the implications of climate change become more severe and disruptive technologies transform industries.

Successful corporations endure for decades, yet tend to communicate in quarters – through the earnings call they make with some of their investors. Many long-term investors don't listen to these earnings calls, as the time-frame they address isn't that relevant to their investment outlook.

This leaves a gap in the market: long-term focused information for long-term investors. This type of information about a corporation could not be more important, both for corporations and for the societies they operate in. Investors need to understand how a corporation's management and board frame its strategy and think about applying its capital in order to respond to the mega-trends impacting its business. Can the company describe a business that is truly sustainable? Over decades, that is, not just quarters. What is needed is a "fifth earnings call" – focused on the long-term – to tell this story and help investors support it.Talking about the long-term

A group of investors, convened by the Strategic Investor Initiative, have called for corporations to deliver long-term plans. So far, 14 leading companies representing around $1 trillion have delivered long-term plans – with many more to follow, including Unilever and UPS.

Long-term plans are a relatively "new" tool for corporations to communicate with their investors. To help them navigate providing a strategic framework for long-term value creation, this group has set out seven key questions for corporations to reflect on when they're preparing their long-term plans, so that the CEOs can help meet the needs of these crucial holders of patient to permanent capital.

Read the full piece on the CECP Insights Blog.