BY IR Web Report Staff
A SURVEY of New York Stock Exchange-listed company CEOs has found that they are less satisfied with their jobs and are spending more time on compliance, board and investor relations than they were three years ago.
About four in ten CEOs say extra compliance costs have resulted in delays and/or cancellation of efforts to grow their business. Chief casualties include strategic planning, infrastructure investment and marketing.
Conducted by Opinion Research Corporation, the survey included telephone, online and questionnaire-based interviews with 205 CEOs. Participants represent more than 50 industries in 21 countries and a combined $1.7 trillion in market cap, 3.8 million employees and 2005 revenues of close to $1.6 trillion.
“This survey provides timely and unique insight into the minds of global chief executives,” said Noreen Culhane, Executive Vice President of the NYSE Group. “Their informed views on the challenges and opportunities facing business leaders today and more importantly their expectations for tomorrow’s business climate makes this instructive reading.”
Highlights from the survey include:
- Most CEOs don’t think their job has improved over the past three years. More than half think it is less fun and rewarding than it was three years ago, and large majorities think it is more time-consuming and stressful than it used to be. Long-serving CEOs particularly see the job as less rewarding, fun and creative than three years ago. Results are similar to what they were last year.
- Compared with last year’s results, CEOs seem to be spending more time on shareholder relations and media relations and less on setting strategy.
- Compared with three years ago, the vast majority of CEOs say they are spending more time on regulatory and compliance issues, as well as reporting to their Boards. CEOs are evenly divided on whether they are spending more or less time on day-to-day management and customer relations.
- CEOs think short-term measures of company health, such as earnings per share growth, cash flow from operations, free cash flow and operating income growth are more important now than three years ago. More traditional measurements, such as total assets and liabilities, liquidity of assets, outstanding debts and credit ratings are viewed as less important now than they were three years ago.
- The majority of NYSE CEOs think growth in both their industry and individual company will be derived primarily from organic growth.
- Compared with last year’s results, CEOs think it is easier now to attract investors and to attract and retain customers.
- When CEOs are asked what country or region is strategically most important to them, aside from the United States, China tops the list, with Western Europe a distant second. India receives no greater focus than a variety of other countries indicating it is now a distant second to China in terms of strategic importance.
- The vast majority of CEOs are positive about the value of Boards of Directors and the guidance they provide. Fully 90% say they have positive relationships with their directors while 83% say directors are an excellent source of advice and insight.
- Asked what the most positive outcome has been of Sarbanes-Oxley and Exchange governance rules, CEOs say Board members are more engaged and investor confidence is improved.
- Fully 97% of NYSE CEOs say their company’s expenses to comply with regulatory requirements have increased since Sarbanes-Oxley went into effect. One in three say expenses have more than doubled. Companies with a market cap under $3 billion have been the hardest hit.
- The vast majority of NYSE CEOs (84%) think CEOs take enough action to protect their company’s reputation.
- The most commonly-used ways to monitor company reputation include informal discussions, employee surveys or discussions, and review of published rankings and media coverage analysis. 58% say their companies monitor the Internet.
The complete report is available as a PDF download (272KB, 62 pages)
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Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.
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