To create sustainable, long-term shareholder value, it is important to explicitly establish an appropriate shareholder value target. The key to reaching this target—and achieving a competitive advantage—is the alignment of business, financial, and investor strategies. Therefore, companies must ask the following important questions:
- How can we pressure-test financial policies to ensure that we have the right capital-structure, dividend, and buy-back policies?
- What is my shareholders’ investment thesis?
- Are my strategies aligned to target the right investors—those that will support my medium- to long-term business and financial strategy?
- Will my plans create enough shareholder value to reach my targets?
BCG works with clients to optimize medium- to long-term total shareholder return (TSR) at both the corporate and business-unit levels. Through proprietary regression techniques, we identify and assess the relevance of the company-specific valuation drivers and benchmark the results against those of peers. Read More