Talent, Strategy, Risk: How Investors and Boards Are Redefining TSR

Description

Long-term value creation - the board's new agenda. A big shift in public ownership has created a new set of challenges for boards. Much of the $14 trillion of assets that firms like Vanguard, BlackRock, and State Street manage is now held in index funds, creating a huge class of permanent institutional investors who own almost 60 percent of the Fortune 500. These investors are stating in no uncertain terms that simply managing for short-term shareholder profit is not acceptable. Bill McNabb, Ram Charan, and Dennis Carey have been on the front lines of these changes with the investment community, corporate boards, and top-level management teams. Since TSR (total shareholder return) cannot keep the short and long term in balance, the authors argue, boards should focus on a different kind of TSR-talent, strategy, and risk-because decisions and actions around these factors, more than any others, determine whether or not a company creates long-term value. This book redefines the board's agenda and explains how to: Build and incentivise the right leadership team Help leaders take a longer view and communicate it to investors Refresh board composition and create diversity to meet the new challenges Keep major risks, such as cyberattacks and sexual harassment allegations, front and centre Analyse the business through the eyes of a shareholder activist With the new realities of corporate ownership, boards need to lead for the long term. This authoritative book shows them how.

Bill McNabb is former Chairman and CEO of Vanguard, the world's second-largest mutual fund manager, with over $5 trillion in assets. Ram Charan is a world-renowned business adviser, author, teacher, and speaker who has spent the past forty years working with the CEOs, boards, and executives of the world's top companies. He is the author or coauthor of more than thirty books that together have sold over four million copies, including Boards That Lead and Talent Wins (both coauthored with Dennis Carey). Dennis Carey is Vice Chairman of Korn Ferry. He has recruited and assessed board directors and CEOs for some of the world's best-performing companies. He has coauthored seven books on talent, strategy, CEO succession, and corporate governance, including Boards That Lead and Talent Wins.

Advance Praise for Talent, Strategy, Risk: "Talent, Strategy, Risk is a must-read for directors, management, and all students of modern twenty-first-century business." - Muhtar Kent, former Chairman and CEO, The Coca-Cola Company; Board Director, 3M "Read this book before your investors do! The authors provide fresh new ideas that will forever change the relationship between those who invest in the company, oversee the company, and manage the company." - Maggie Wilderotter, former Chairman and CEO, Frontier Communications; Board Director, Sana Biotechnology, Lyft, DocuSign, Hewlett Packard Enterprise, and Costco Wholesale "This is the first book I know of that powerfully establishes the links between talent, strategy, and risk and explains how these three foundations of value creation are being evaluated by investors. A timeless and timely book indeed." - Dinesh Paliwal, Partner, KKR; former President and CEO, Harman International; and Board Director, Bristol Myers Squibb, Nestle, and RTX Corporation "This book covers new ground with fresh ideas about how CEOs need to rethink the impact of a rapidly changing investor landscape. I especially enjoyed reading Warren Buffet's formula for M&A risk mitigation, as told by Warren himself! These three authors hit it out of the park." - Ed Breen, Executive Chairman and CEO, DuPont; Board Director, Comcast "A groundbreaking guide to reshaping board members' concept of their role as companies move into more complex environments requiring greater and more tactical oversight." - Denise Ramos, former President and CEO, ITT Inc.; Board Director, Phillips 66, Bank of America, and Raytheon Technologies "There is no better explanation of, and validation for, shareholder and stakeholder governance than this stunning book." - Marty Lipton, Founding Partner, Wachtell, Lipton, Rosen & Katz "While many companies approach talent, strategy, and risk independently, the authors successfully argue the need for boards to address them holistically in order to create positive outcomes for each and to advance long-term shareholder value." - Ken Chenault, Chairman and Managing Director, General Catalyst; former Chairman and CEO, American Express; and Board Director, Airbnb and Berkshire Hathaway