Problematical Issues Facing America’s Corporations – Introduction

Corporations currently face many ongoing challenges, and these challenges will grow in magnitude.

At this point (September 2016) challenges are being presented in a variety of areas, including maintaining the high levels of (aggregate) corporate profitability that has recently been attained, as well as achieving higher levels of revenue growth, as such revenue growth has been problematical despite significant gains in profitability.  As well, there are many other types of complex issues that are highly problematical yet receive little recognition.

Another facet of great importance is the identification of what actions are being taken that should not be taken – as well as actions that should be taken which are being neglected.

While many of the challenges and problematical conditions facing companies is under the purview of executive management, much falls under the responsibilities of corporate boards.  Matters of corporate governance are of great importance at this time, and proper corporate governance can’t be achieved without the proper functioning of corporate boards.  While the proper functioning of corporate boards is a lengthy and, at times, complex subject, various problems can be succinctly stated.  Among these is corporate risk management.  Various others are stated by David Dalka, Founder and Managing Director at Fearless Revival, a CEO and board advisory services firm:

“There are abundant opportunities for boards of directors to influence CEO’s to achieve superior long-term operating results. Board effectiveness can improve in areas like board independence and focus on primary board responsibilities versus getting deeply involved in the detailed work of corporate staff (audit, compensation, etc.). Returning board focus to the ongoing concern and CEO succession planning will improve outcomes for customers, employees, and shareholders.”

While the extent of the future problematical conditions faced by corporations is difficult to exactly determine, there are many indications and projections that indicate the problematical conditions are – and will be – substantial in nature.  In fact, many corporations will almost certainly face challenges to their ongoing existence.  As most business are pro-cyclical (i.e. their success and viability is highly positively correlated to the strength of the economy) if the economy does well, most businesses will benefit.  However, the opposite is also true.  While these problematical conditions are numerous and complex, and as such can’t be properly addressed in a brief manner, businesses should be highly concerned with these various dynamics, especially given that problematical conditions exist now despite the recent-era highly favorable business conditions, including the long (as officially defined) economic expansion since June 2009 and other highly favorable financial conditions.