TAKING A LONG-TERM AND A SHORT-TERM VIEW: Sometimes it's wise to sacrifice immediate profits to build market share in the future.

• Author: Useem, Michael

Company executives remain under pressure from investor activists, institutional holders and equity analysts to deliver earnings, pay dividends and buy shares back now--this year or even this quarter. The continuing intensity of those near-term calls comes as no surprise, as hedge funds have amped up their megaphones, active investors trade more frequently and equity analysts are ever put off by more immediate shocks.

But an inside source may also be adding to that outside drumbeat, even if inadvertently: the governing board. Two-thirds of the chief executives in one survey affirmed that the greatest single demand for near-term results actually came from their own directors. Yet, if so, how can that be? Isn't the polar opposite--long-term thinking--also one of a director's callings, a raison d'etre for serving on a governing board in the first place? Or, as one chief executive summed it up in Go Long: Why Long-Term Thinking Is Your Best Short-Term Strategy, the book I wrote with Dennis Carey, Brian Dumaine and Rodney Zemmel, shouldn't directors be making "bets" that "last longer than any CEO"?

While I heartily concur with the long-term pleas and I believe that most directors do so as well, I am also mindful that we all sometimes run up against a shortfall in the human condition well-documented by university researchers. Stanford University's Jeffrey Pfeffer and Robert Sutton caution against "the knowing-doing gap," where we do not always translate what we hold dear into what we actually do. Nobel Prize winner Daniel Kahneman similarly counsels against an overreliance on "intuitive thinking" and favors also incorporating "deliberative thinking," a disciplined pathway to more distant goals.

Directors are therefore wise to ask themselves whether their actions are indeed going to actually champion both long and short performance, especially when the latter overshadows the former. Directors, secondly, will be sensible to partner closely with executives in doing so, since both are called to do so. And thirdly, directors and executives will be better equipped to collaborate on both if they have examples to guide their own actions, learning for themselves from the experience of others.

To illuminate this three-part agenda for going short and long, we focus on the decision of CVS, America's largest pharmacy and convenience store chain, to banish tobacco products from its shelves. This board-sanctioned action plan may be particularly instructive...