When it comes to what shareholders want to hear from companies they’ve invested in, a few traditional elements come to mind: management policies, performance measurements, and unambiguous expectations, among others. But a recent study has pointed out that an additional element of a business’ management strategy has shareholders weighing in: succession.
The report is the AMP Capital’s Corporate Governance Report 2013. (AMP Capital is an Australian bond fund and asset management firm.) Behind the findings is the concern that shareholders bear regarding long-term futures of companies. Naturally, shareholders want assuredness of the future of a company just as much as they do the immediate value available, but it is understood that investment today in short-term projects will ideally mean long-term value. Shareholders want to be assured that succession planning is in place to ensure future quality, future leadership, and that long-term goals will not be compromised by changes in command.