The New TSR
A Framework for Long-Term Management
Talent, strategy, and risk encapsulate the work of a company, broken down into its discrete functional elements—the spheres that the CEO must manage and that the board must oversee, with the aim of enhancing long-term shareholder value. The new TSR is a tool that boards can use to escape short-termism and reorient for the long term. If the board can get the new TSR right, the old TSR will take care of itself.
These three spheres are tightly interrelated. The board must nurture a leadership team suited to create and execute the strategy that the company will need to thrive in the marketplace of the future. And the directors must make sure that the company’s strategy both mitigates risks that can threaten the enterprise and embraces risks that present an opportunity for long-term value creation.
Master these three realms—as the first part of this book will show you—and the board will be able to answer the essential question: How does the company grow?