Predicting quarterly earnings, bad. Focus on long-term goals, good.
That’s today’s message from two titans of the business world — Warren Buffett and Jamie Dimon (both of whom need no further introduction here).
Advocates of sustainable business might well take note of these highlights of their Thursday CNBC interview as reported by AP:
“‘When companies get where they’re sort of living by so-called ‘making the numbers’, they do a lot of things that really are counter to the long-term interests of the business’ Buffett said
“Dimon said companies might forego investments they should make in their business, such as marketing, hiring or research in order to hit hit-term goals.”
AP also noted that:
“Both men said they still want companies to release detailed quarterly and annual financial data, so investors can evaluate them.
“Business Roundtable [which Dimon leads] … supports moving way from offering quarterly guidance and focusing on long-term goals.”
This kind of leadership — a long-term focus on a company’s success — is right in the wheelhouse of the fast expanding sustainability/corporate social responsibility business model.
Many companies, such the approximately 9700 firms in the United Nations Global Compact, have determined that long term profitability can be protected — even enhanced — by operating in concert with socially responsible principles.
And an incipient corporate reporting concept, integrated reporting of environmental/social/governance (ESG) operations as well traditional financial, is well underway, championed by the International Integrated Reporting Council .
IIRC’s mission could be a Buffett-Dimon anthem:
“Value creation over time and related communications regarding aspects of value creation.”