The Problem with Public Corporations

Ethics Daily has published an outstanding essay about "The Private Lives of America's Top Managers." It is a succinct examination of the effect of pressure to meet earnings expectations on a quarterly basis. Here's a quote:

Asked if they would pursue a positive net value project if it meant missing the earnings-per-share estimate for the quarter, 59 percent of financial executives admit that they would kill the project.

Equally troubling, 78 percent of executives admit they would forego real value in order to meet their earnings targets.

In my experience, once senior managers become obsessed with short-term results, it's almost impossible to have a meaningful discussion about treating their workers as valued partners, or delivering real customer service, or pursuing an environmentally sustainable plan.