This is a great principle, since investors are of course a critical constituency – along with customers and staff – whose loyalty is valuable. And as for any ‘product’ loyalty to a firm more likely if investors know and understand that product. Public companies have been obliged for some time to include in their annual returns a ‘discussion’ about their strategy and prospects [called the Management Discussion and Analysis in the U.S.], so with all this required transparency, how come investors get so misled by simple strategic issues [like the Starbucks’ pushy pricing and over-expansion I've posted on before, or the many, many banks who stupidly over-sold high-risk loans]?

The headline answer is that we still – after half a century of trying – don’t know how to work out the link from strategy to performance, and the academics and consultants are fully aware of this problem. [As you probably know, I think there's a way to do this, even if it's not yet widely known or practised]. Just one part of the problem, for example, is that we know intangible items like staff skills and market reputation ‘matter’, but don’t know how to build these into our analysis – see Invisible Ink previously published in Business Strategy Review, outlining briefly how to make the link from intangible factors to performance – more detail in chapters 9 and 10 of Strategic Management Dynamics [UK link].