Beth Collins, CFO of Software Sense, an American multinational computer hardware and software developer, contemplated various ways that her publicly traded company could embrace a more long-term orientation in its quarterly reports and throughout its reporting ecosystem. Like other publicly traded companies, Software Sense faced constant pressure from investors and analysts to increase short-term financial-performance metrics, particularly in its quarterly earnings calls. Many in business were concerned about the deleterious effects of short-termism, which referred to the practice of focusing on short-term rather than long-term performance and results; these effects included less attention paid to long-term value creation and innovation, strategy, and fundamentals; less R&D investment; and the implementation of high-risk strategies that could threaten the company's health.
Recently, Collins had read about and heard presentations by Chief Executives for Corporate Purpose (CECP), an initiative encouraging business leaders to reframe investor calls away from short-term reporting and toward a more long-term strategic approach and orientation. As she researched CECP's recommendations and strategies, Collins could see the benefits of this approach—but also the potential problems.