FCLTGlobal's "The Dangers of Buybacks: Mitigating Common Pitfalls" discusses the most commonly cited advantages and disadvantages of stock buybacks in the context of effecting a long-term orientation. The organization supports using buybacks as a capital allocation tool provided the "long-term value-destroying" behaviors sometimes associated with buybacks are appropriately mitigated. Along those lines, the report suggests a series of action steps companies, investors, and regulators can pursue to facilitate the upsides and mitigate the downsides, which are also conveniently captured in FCLTGlobal's "Buybacks Playbook."
See our prior reports: "Share Buyback Engagement Framework Instructive for Investors & Companies" and "Directors Speak: Stock Buybacks & Disclosure Examples" (in Company News) and additional information & resources on our Capital Allocation/Capital Structure page. This post first appeared in the weekly Society Alert!