CEOs expect the global trade environment to have a favorable impact on their businesses in the near future, according to the NYSE CEO Report 2008, a survey of chief executive officers of the world's top businesses conducted by Opinion Research Corporation on behalf of NYSE Euronext.
The collective responses from the 240 CEOs of NYSE-listed companies suggest that an organization's ability to conduct business globally will be vital to its success in 2008 and beyond. Nearly half of the CEOs (48 percent) cited global trade as having a favorable affect on their organizations, signaling more optimism in the C-suite's outlook on the global trade environment, compared with 38 percent in the 2007 report.
The survey results also indicate that most CEOs view emerging markets as an opportunity, while very few see them as a threat. Companies based outside the U.S. are even more positive about emerging markets than those based in the U.S. "The NYSE CEO Report 2008 provides insight into the evolving priorities of the CEOs of our listed companies," said John A. Thain, CEO and Director of NYSE Euronext. "As CEOs continue to deal with the fast-changing challenges and opportunities in an increasingly global economy, these results clearly indicate key issues that business leaders and their constituents will address."
Growing Importance of Emerging Markets
While the U.S. continues to be seen as the most crucial market for doing business, China and Western Europe are also regarded as important regions. In addition, the emerging economies of India and Eastern Europe are now becoming increasingly important as possible locations to set up operations. Moving operations offshore is also being cited as a successful business strategy, with 47 percent of NYSE CEOs indicating that their company has moved operations offshore at some time.
"Global expansion is no longer just the domain of a few forward thinking CEOs. For today's leaders, the question is not whether to expand globally, but rather which markets to focus on," said Jeff Resnick, President of Opinion Research USA. "It is clear from this year's survey that globalization is now part of the fabric of decisions concerning market extension, operations, growth and profit."
Legal and Regulatory Changes Incite Competitive Edge in U.S. Capital Markets
The NYSE CEO Report also illustrates that CEOs believe changes to the American legal system to lower litigation risks would increase the competitiveness of U.S. capital markets (according to 94 percent of U.S. CEOs and 79 percent of non-US CEOs). Eighty-eight percent of CEOs would consider the streamlining of the U.S. regulatory system and the easing of certain governance rules and regulations as positive moves.
"The questions we get [from regulatory bodies] reveal the lack of knowledge about the energy industry, its enormous scale and the long-term nature of our business," says Rex Tillerson, CEO of ExxonMobil Corp. "Without understanding our business fundamentals, policy-makers might make decisions today that can have long-term, negative consequences for society."
CEOs Optimistic about the Economy
U.S.-based CEOs also demonstrate great optimism about the U.S. economy, more so than the general U.S. adult population. Only 37 percent of American adults* vs. 84 percent of CEOs would rate current U.S. economic conditions as excellent or good.
"The integration of the global economy, advanced with respect for local interests and cultures, remains the most effective means to lift people out of poverty, advance prosperity and ensure the sustainability of business," says Neville Isdell, Chairman and CEO of The Coca-Cola Company.
The report also assesses CEO views on topics ranging from growth opportunities and risks to technology ROI, regulatory compliance, globalization, human capital and reputation management.
Insights include:
" Most CEOs (81 percent) believe they take sufficient action to manage their companies' reputation, while 47 percent of the adult American public feels CEOs could do more.*
" Almost one-third of CEOs will spend more time on customer relations; more than half expect to spend more money on it; and two in ten CEOs cite customer satisfaction as the most crucial element to their long-term success as CEO."
" Nearly twice as many non-U.S. CEOs than U.S. CEOs feel strongly that they have a positive relationship with their boards (43 percent vs. 24 percent).
" Two in ten CEOs cite ROI on technology investments as falling short of their expectations, particularly for companies with less than $1 billion in market cap (30 percent).
The full survey findings can be downloaded from http://www.opinionresearch.com or http://www.nyse.com/ceoreport.
