The Number One Way to Destroy Your Private Company Wealth

The Number One Way to Destroy Your Private Company Wealth

From George Isaac via CNBC: Many privately held businesses unwittingly destroy shareholder wealth every year because of two easily reversed flaws.

First, most boards and CEOs focus only on operating entity results. They give priority to issues such as business strategies and plans, financial budgets, organizational issues and major transactions. They often select corporate ROE (return on equity) as a major metric, which is an appropriate element to consider.

Yet surprisingly, despite their legal and fiduciary responsibilities, few private company boards pay attention to perhaps their most important function: maximizing realized shareholder ROE. Read the entire article here.