dividend decisions can be hard to reverse and that dividends can be tax inefficient. 10. When prices are extremely high, it’s OK to consider selling businesses or stock. It’s also OK to close under-performing business units if they are no longer capable of generating acceptable returns.

Comment: Projects with higher risk (such as acquisitions) should require higher returns. Be very wary of the adjective strategic—it is often corporate code for low returns. 4. Calculate the return for stock repurchases. Require that acquisition returns meaningfully exceed this benchmark. Comment: While stock buybacks were a significant source of va

Gawande advises that these lists are best kept to ten items or fewer, and we will conclude with a checklist drawn from the experiences of these outsider CEOs, to aid in making effective resource allocation decisions (and hopefully avoiding value-destroying ones). So, here we go: 1. The allocation process should be CEO led, not delegated to finance

Naturally shy, she was understandably terrified. This story, although remarkable, is well known (the best version by far being Graham’s own Pulitzer Prize–winning autobiography, Personal History, published in 1997).

He believed in the naval succession model in which retiring captains avoid returning to their ships so as not to interfere with their successor’s authority, and proudly told me that he had spoken only once to Mellor’s successor, Nick Chabraja, since 1997.

with debt. Singleton, who employed this approach no fewer than eight times, disdained the “straw,” preferring instead a “suction hose.”

The other approach, the one favored by the CEOs in this book and pioneered by Singleton, is quite a bit bolder. This approach features less frequent and much larger repurchases timed to coincide with low stock prices—typically made within very short periods of time, often via tender offers, and occasionally funded

Fundamentally, there are two basic approaches to buying back stock. In the most common contemporary approach, a company authorizes an amount of capital (usually a relatively small percentage of the excess cash on its balance sheet) for the repurchase of shares and then gradually over a period of quarters (or sometimes years) buys in stock on the op

In a rare interview with a BusinessWeek reporter, he explained himself more simply: “My only plan is to keep coming to work. . . . I like to steer the boat each day rather than plan ahead way into the future.”11