Just How Different Are Public And Private Firms? 

Freedom from quarterly earnings calls and onerous reporting requirements are often cited as some of the defining advantages of being a private company. Without regulatory reporting requirements or the scrutiny of public markets, private company leaders say they have greater latitude to focus on long-term strategy.  

Yet new survey data reveals an interesting pattern: Despite that freedom, many private companies have adopted governance approaches that closely resemble their public counterparts—raising questions about how ownership structure influences strategic planning in practice. 

A new survey by Chief Executive Group Research, conducted in partnership with the Long-Term Stock Exchange, finds that while private company leaders emphasize their independence from short-term pressures, relatively few have adopted the mechanisms typically associated with disciplined long-term oversight. Fewer than four in 10 private companies report using multi-year capital-allocation frameworks, long-term performance dashboards or incentive structures tied to multi-year outcomes. 

When asked how they ensure that short-term pressures do not overshadow long-term goals, 86 percent of private company respondents said they hold dedicated executive sessions focused on long-horizon strategy, compared with 71 percent of public company leaders. Beyond that, however, the numbers converge. 

Perhaps more notably, private company leaders report spending just 25 percent of their executive meeting time discussing long-term alignment, no more than their public company peers.  

“The survey underscores that long-term thinking is less about ownership structure and more about intentional design,” says Maliz Beams, CEO of the Long-Term Stock Exchange Group, a partner in this research. “Private companies have flexibility in how they set accountability and review progress, and the most effective leaders use that flexibility to align governance, strategy and incentives around superior long-term value creation.” 

The findings come at a moment when interest in going private remains elevated. Public companies increasingly cite the cost of regulatory compliance and the burden of quarterly reporting as reasons to exit the public markets. Several survey respondents echoed that sentiment. 

“The significant cost of regulatory compliance is a big factor driving public companies to go private,” said one private company CEO polled. 

“It’s easier to run the business,” added another, touting the advantages of going private. “Less reporting and headaches.” 

That reduced administrative burden is a tangible benefit of private ownership. The survey data, however, suggests it may come with tradeoffs in how companies structure accountability for long-term objectives. Nithya Das, chief legal officer and general manager of the governance business unit at Diligent, works closely with private organizations on governance structures. She points to governance as a key factor in whether companies are able to translate long-term aspirations into sustained growth. 

“So many CEOs and private companies make the mistake of believing that governance is something that they don’t need to invest in until they’re getting closer to an IPO or they’re getting closer to some bigger growth milestone,” Das says. “But in my experience, private companies who adopt those public company governance mechanisms early in their life cycle are the companies that are able to control their own destiny.” 

Private equity- and venture capital-backed companies often adopt rigorous oversight structures early, driven by compressed growth timelines and explicit performance expectations. Family-owned or employee-owned businesses, by contrast, may allow for greater flexibility around targets and timelines. According to Das, that flexibility can come at a cost if it results in less disciplined decision-making. 

“If companies can start making the governance of decision-making more efficient, I think they actually start to execute better,” she says. “They start to execute more quickly, and they start to post results more quickly.” 

Without structured processes, companies risk becoming consumed by immediate demands. Das describes this as the “hamster wheel,” where leadership attention is absorbed by the next urgent issue rather than longer-term priorities. The survey data reflects that tension. On average, private companies’ long-term strategic growth plans extend only five years into the future. Nearly one-third of respondents plan three to four years ahead, while just 18 percent look out a decade or more. 

That relatively short planning horizon may help explain another finding: While private companies are not required to report results quarterly, many still choose to do so. Nearly half of respondents said they review financial and operational performance against their long-term strategic plan on a quarterly basis. Another 18 percent do so semi-annually, while nearly one-third review progress only once per year. 

“In conversations with late-stage private company CEOs, we see wide variation in how long-term strategy is actually managed. As companies grow, complexity increases, and informal decision-making often gives way to more structured review and governance,” says Shahnawaz Malik, head of LTSE Private Markets. “The challenge is not avoiding short-term pressure altogether but putting in place mechanisms that help leadership stay aligned with long-term objectives as the business scales.” 

Michael Carragher, CEO and chair of VHB, a 50-plus-year-old civil engineering firm, places particular value on quarterly accountability. He has implemented quarterly board reporting that tracks both current performance and progress toward multi-year objectives. 

“The thing we’ve really tried to do is identify those major arcs or areas of impact or progress we want to make and not be too detailed prescriptive on what they are as we look four, five, six years out,” Carragher says. “But make sure whatever we’re doing this year or over the next two to three years is putting us in a better position to get where we want to get over that five, six-year period.” 

At VHB, long-term expansion goals—such as entering a new geographic market over five years—are broken into intermediate steps that are reviewed quarterly. “As long as we’re moving in that direction and we’re hitting the annual operating expectations, trying to get everybody to realize these are the four or five big things we’re trying to accomplish over the course of the five-year period keeps everybody moving forward,” Carragher says. 

That discipline, he notes, depends on having a clear picture of future success. Without it, decisions naturally tilt toward what is immediately efficient or profitable. “You’ve got to internalize the reaction and remind everybody of the long term and tie whatever decision you’re making, even if it’s due to something short term, how it impacts or how it detracts for your decision matrix, from getting where we’re trying to go,” he says. 

The survey suggests that clarity around long-term direction is particularly important given the range of end states private companies envision. While nearly half of respondents expect to remain private under current ownership, more than a third anticipate a strategic acquisition. Others are preparing for private equity investment, next-generation ownership or even a potential IPO. 

Taken together, the findings paint a picture of private companies that value long-term thinking but often rely on familiar structures to achieve it. Even without quarterly earnings pressure, many continue to organize strategy, reporting and accountability around the same rhythms as public companies—raising the question of whether the freedom of private ownership lies less in abandoning those mechanisms than in how deliberately they are used.