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From a strategic point of view, focusing on dividends is putting the cart before the horse. What directly affects the long‐term economic performance of a firm is how much of its cash it plows back into the business. Dividends should be a potential use for funds remaining after key reinvestment decisions are made, rather than the other way around.

The American business community has recognized the importance of strategy as a determinant of corporate success. Academics, consultants, and executives themselves have studied the subject in depth and have written extensively on it. Any corporation with pretensions of being well‐managed has installed a strategic planning procedure to improve its prospects of long‐term success.

Several years after he had installed an elaborate strategic planning system, the chairman of a diversified New York Stock Exchange company began wondering if it was worth the effort. When he took a closer look, he found that the plan's only real function was to serve as a model for preparing the next one a year later. So he scrapped the whole procedure, instructing each division manager to do whatever planning he felt was appropriate for his own unit.

The grass may seem greener in another field, but take a long, hard look before your company diversifies. The pitfalls of scattering your resources—technology, knowledge, management, human skills, and finances—can mean disaster. Concentrate instead on focusing your energies and gaining competitive advantage.

Brazil's enormous natural resources, which include new mineral discoveries and agricultural developments, are gradually being exploited to fuel the country's development. These riches make it one of the world's leading exporters of natural resources and commodities.

In the history of most corporations, strategic change is a slow, evolutionary process. Strategic planning is useful primarily to facilitate a successful adjustment of operations and resources to a changing environment.

In any corporate setting, the way certain key issues are handled will have a major influence on results over an extended period. Some such issues are specific to the individual situation. Others apply to almost any company. These include:

In a capitalistic society, the decisions about investing capital in productive resources are made primarily by private enterprise. The long‐term economic success of individual corporations and of the society as a whole are largely determined by the quality of such decisions. Therefore, dealing with questions about raising, investing, and managing capital is among the most important responsibilities of a board of directors.

More and more members of the business community agree that boards of directors have a responsibility for seeing that their companies have an effective strategy. But there is little agreement on what constitutes a corporate strategy, and even less on what characterizes an effective one.

Boards of directors have been pressed over the past decade to improve their monitoring of a company's economic performance. In addition, legal actions are forcing them to become overseers of what management does, both in delivering returns to investors and in obeying the various laws to which corporations are subject. But most importantly, boards are being charged with the long‐term responsiveness of the corporation to its economic environment and society. It is these pressures that require the board to take a more effective role in articulating the mission and strategies of the firm, allocating appropriate resources, and ensuring coherent appraisals of those strategies.