City and shareholder pressure for short-term results is holding back long-term company growth, says a new study from consultants Egremont.
In a survey of 103 UK CEOs and directors, 67% of companies were setting growth targets ahead of the industry average because of the pressures and 60% rated themselves below average at responding to City expectations.
Edwin Booth, chairman of independent retailer Booths, said in an interview with Egremont: “Shareholders are paying for results and the pressure they exert can lead to an unhealthy level of anxiety that drives wrong decisions.”
This, said the report, forced companies to alter strategies, with 81% of leaders saying the urgency to change was now greater than two years ago.
The report added that companies must resist strategic review that is continuous and focus on existing strategy.
The urgency to respond diverts companies from investing in longer term and fundamental improvements, it claimed.