CEO & Corporate Reputation

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CEO & Corporate Reputation

Jeanette Dyhre KvisvikManager, Burson-Marsteller, Norway

Hotel Nordica, Reykjavik, Thursday 21. September

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CEO Reputation

““Despite the size and complexity of Despite the size and complexity of modern corporations, the person in modern corporations, the person in charge still sets the tone, defines charge still sets the tone, defines the style, becomes the company’s the style, becomes the company’s public face.”public face.”

Fortune, Fortune, November 18, 2005November 18, 2005

““It takes a lifetime to build a It takes a lifetime to build a reputation, and only a short time to reputation, and only a short time to lose it alllose it all.”.”

Joseph Neubauer, Joseph Neubauer, CEO of Aramark, CEO of Aramark, BusinessWeek, BusinessWeek,

September 23, 2002September 23, 2002

http://www.business20.com/archives/0,1661,4,00.html?volID=340

http://www.chiefexecutive.net/mag/190/toc.html

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Corporate Reputation

“ “ If you lose dollars for If you lose dollars for the firm by bad the firm by bad

decisions, I will be decisions, I will be understanding. If you understanding. If you lose reputation for the lose reputation for the

firm, I willfirm, I willbe ruthless.”be ruthless.”

Warren Warren BuffettBuffett

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How to build trust

Stakeholder map- The various needs for communication

Financial society

Political society

The mediaPublic opinion

Internally

CEO &company

5

Agenda

Global Survey- CEO Capital and Corporate Reputation 2005

Norwegian Survey- CEO and Corporate Reputation 2006

An example- Norsk Hydro- Norways second largest oil company

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Building CEO Reputation - GlobalBuilding CEO Reputation - Global

Now in its fifth wave, Burson-Marsteller’s first CEO Reputation Study was conducted in 1997

The research was conducted online with the Economist Intelligence Unit (EIU), a world leader in global business intelligence and the business–to–business arm of The Economist Group.

The sample includes over 600 business influentials from 65 countries:

– 146 CEOs– 146 senior executives– 188 financial analysts

– 103 business journalists

– 102 government officials

7

The SampleThe Sample

32%

26%

10%

32%

Europe

North America

Asia-Pacific

Latin America

22%

16%

16%

23%

23%

CEOsSenior ExecutivesFinancial AnalystsBusiness JournalistsGovernment Officials

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CEO Reputation

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On a global basis, the CEO is held responsible for 47% of a company’s reputation. Europeans and North Americans attribute less responsibility to the CEO than do Asia/Pacific and Latin American influentials.

How much does CEO Reputation Matter?How much does CEO Reputation Matter?

55 %

52 %

44 %

43 %

47 %

0 % 10 % 20 % 30 % 40 % 50 % 60 %

Latin America

Asia/Pacific

North America

Europe

Total

2005 CEO Contribution to Corporate Reputation

10

How does CEO Reputation pay off?How does CEO Reputation pay off?

Rank

Pay attention to what a CEO has to say 1

Recommend company as good alliance/merger partner 2

Give a company more time to succeed 3

Maintain confidence in company when share price lags 4

Buy stock in a company 5

Believe a company under pressure from the media 6

Recommend a company as a good place to work 7

Recommend a company’s stock 8

Prefer a company’s products and services 9

Paying attention to what a CEO has to say and recommending the company as a preferred partner is the greatest benefits of having a good CEO reputation.

SCORECARD

North America Buy or recommend stock

Latin America Recommend company as alliance partner or good place to work

CEOs Maintain confidence when share price lags

The scorecard identifies regions and segments where scores are higher or lower than the average.

11

What builds CEO reputation?What builds CEO reputation?

RankRank

Is credible 1

Attracts & keeps quality management team 2

Communicates clear vision *inside* company 3

Demands high ethical conduct 4

Motivates & inspires employees 5

Manages crises and downturns effectively 6

Communicates clear vision *outside* company 7

Executes well on strategic vision 8

Cares about customers 9

Fosters corporate governance 10

Delivers financial results 11

Increases shareholder value 12

Credibility, attracting quality management and communicating a clear vision internally are the top three measures that shape CEO reputation. Delivering financial results is necessary for a CEO, but being credible is paramount.

Top 12 of 20 CEO qualities

SCORECARD

North/Latin America Demand high ethical conduct

North America/Asia/Pacific Foster corporate governance

Latin America Attract quality management team

Financial Analysts Manage crises/downturns effectively

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What builds CEO reputation- EuropeWhat builds CEO reputation- Europe

TotalTotal EurEur NANA A/PA/P LALAIs credible 1 1 1 1 1Attracts & keeps quality management team 2 3 3 3 9Communicates clear vision *inside* company 3 2 6 4 3Demands high ethical conduct 4 9 2 5 2Motivates & inspires employees 5 4 10 2 5Manages crises and downturns effectively 6 7 4 8 4Communicates clear vision *outside* company

7 5 8 7 10

Executes well on strategic vision 8 8 9 9 6Cares about customers 9 6 5 10 8Fosters corporate governance 10 10 7 6 12Delivers financial results 11 11 11 13 7Increases shareholder value 12 15 13 11 13

All business influentials agree that credibility drives CEO reputation. Demanding high ethical conduct ranked relatively low for European influentials, possibly because Europeans already expect strong ethics from their companies’ leaders.

= lower than total = higher than total Top 12 of 20 CEO qualities

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Top 25 Most Admired CEOsTop 25 Most Admired CEOs

Worldwide, Bill Gates is the most admired CEO by business influentials by a large margin.

Steve Jobs and Warren Buffett rank a distant second and third.

CEOs from North American, European and Asian/Pacific companies are represented on this most admired list.

CEOCEO CompanyCompanyJeff Bezos Amazon.comJohn Bond HSBC HoldingsRichard Branson Virgin GroupJohn Browne BPWarren Buffett Berkshire HathawayJohn Chambers Cisco SystemsMichael Dell DellLawrence Ellison Oracle

Bill Gates Microsoft

Carlos Ghosn Nissan & RenaultJeffrey Immelt General ElectricSteve Jobs Apple ComputerHerb Kelleher Southwest AirlinesA.G. Lafley Procter & GambleTerry Leahy TescoLakshmi Mittal Mittal SteelRupert Murdoch News Corp.N. R. Narayana Murthy InfosysJorma Ollila NokiaAzim Premji WiproCarl-Henric Svanberg EricssonRatan Tata Tata GroupDaniel Vasella NovartisMeg Whitman eBayJack Welch General Electric

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Top 25 Most Admired CEOs: European InfluentialsTop 25 Most Admired CEOs: European Influentials

Among European business influentials, Bill Gates is the most admired CEO worldwide.

CEOCEO CompanyCompanyJosef Ackermann Deutsche BankJohn Bond HSBC HoldingsPeter Brabek NestleRichard Branson Virgin GroupJohn Browne BPWarren Buffett Berkshire HathawayJohn Chambers CiscoMichael Dell Dell

Bill Gates Microsoft

Carlos Ghosn Nissan & RenaultFred Goodwin Royal Bank of ScotlandJeff Immelt General ElectricSteve Jobs AppleTerry Leahy TescoLakshmi Mittal Mittal SteelRupert Murdoch News CorporationJorma Ollila NokiaHelmut Panke BMWHoward Stringer SonyCarl-Henric Svanberg EricssonRoger Talermo Amer GroupDonald Trump TrumpDaniel Vasella NovartisJack Welch General ElectricWendelin Wiedeking Porsche

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Drivers of Corporate ReputationRankRank

High quality products and services 1Communicates effectively externally 2Has high quality management 3Focuses on serving customers 4Is honest with stakeholders 5Attract, develop & retain talent 6Is well-governed 7Communicates effectively internally 8Behaves ethically 9Responds effectively to change 10Is a good financial performer 11Is innovative 12Is a good place to work 13Is socially responsible 14Is an industry leader 15Is environmentally responsible 16Is truly global 17Is the largest in its industry 18

SCORECARD

Europe Stakeholder honesty and ethical behavior

Asia/Pacific Honesty with stakeholders and good governance

Communicating externally

CEOs Focus on serving customers

Financial Analysts Honesty with stakeholders and effective internal communications

High quality management

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Drivers of Corporate Reputation

TotalTotal EurEur NANA A/PA/P LALAHigh quality products/services 1 3 1 1 2Communicates well externally 2 1 3 6 1Has high quality management 3 4 2 4 4Focuses on serving customers 4 2 8 5 7Is honest with stakeholders 5 10 5 2 3Attract, develop, retain talent 6 5 6 9 9Is well-governed 7 8 7 3 5Communicates well internally 8 6 10 7 8Behaves ethically 9 12 4 8 6Responds effectively to change 10 7 9 11 13Is a good financial performer 11 11 11 10 10Is innovative 12 9 12 12 11Is a good place to work 13 13 13 13 12Is socially responsible 14 14 15 14 15Is an industry leader 15 16 14 15 16Is environmentally responsible 16 15 16 16 14Is truly global 17 17 17 17 17Is the largest in its industry 18 18 18 18 18

Europeans rank external communication as the number one driver of company reputation.Honesty with stakeholders was ranked relatively low, possibly reflecting a European expectation for honest behavior.

= lower than total = higher than total

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Payoffs of Good Corporate Reputation

TotalTotal

Ability to attract and retain talented employees 1

Ability to attract new business/partners/acquisitions 2

Increased loyalty from customers/clients 3

Confidence the company will do the right thing 4

Ability to quickly recover from reputation problems 5

Better able to withstand economic ups and downs 6

Better relations with regulators/government 7

Higher share price than competitors 8

Ability to charge premium prices 9

Attracting top talent is the biggest payoff of developing a good corporate reputation. Other perceived payoffs include the ability to attract new business and increased customer loyalty.

SCORECARD

Latin America Confidence that company will do the right thing

Latin America/Asia Pacific Better relations with regulators/government

CEOs Confidence that company will do the right thing and a higher share price.

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Our Approach

Client CharterClient Charter

Desired Desired Business Business ResultsResults

Corporate Reputation ResearchCorporate Reputation Research

CEO Reputation ResearchCEO Reputation Research

Corporate Brand Valuator Corporate Brand Valuator

Fortune’sFortune’s America’s Most Admired Companies America’s Most Admired Companies

Fortune’sFortune’s Global Most Admired Companies Global Most Admired CompaniesReputation IndexReputation Index

Brand Asset Valuator (BAV)Brand Asset Valuator (BAV)

InsightsInsightsAnalysisAnalysis

Assessment Assessment

Reputation Report CardReputation Report Card

CEO Reputation Report CardCEO Reputation Report Card

Culture Capital AssessmentCulture Capital Assessment

Corporate Equity AnalysisCorporate Equity Analysis

Seasons of a CEOSeasons of a CEO

Environmental ScanEnvironmental Scan

Competitive Platform Analysis/BenchmarkingCompetitive Platform Analysis/Benchmarking

Strategic Strategic ProgrammingProgramming

Corporate IdentityCorporate Identity

Vision and Values Vision and Values CEO Platform DevelopmentCEO Platform Development

CEO’s First 100 DaysCEO’s First 100 Days

Integrated Communication Integrated Communication

StrategyStrategy

Brand DefinitionBrand Definition

Thought LeadershipThought Leadership

Creative Creative ExecutionExecution

Media RelationsMedia Relations

CEO Dance CardCEO Dance Card

Investor RelationsInvestor Relations

Employee & Constituency EngagementEmployee & Constituency Engagement

Web CommunicationsWeb Communications

Corporate and Internal AdvertisingCorporate and Internal Advertising

Customized Training ProgramsCustomized Training Programs

Corporate Social ResponsibilityCorporate Social Responsibility

Results Results and and

MeasurementMeasurement

Stock Price/Market ShareStock Price/Market Share

Rankings & ScorecardsRankings & Scorecards

Feedback AnalysisFeedback Analysis

Culture QuotientCulture Quotient

Recruitment & RetentionRecruitment & Retention

Media Coverage/PenetrationMedia Coverage/Penetration

Strategic Stakeholder Strategic Stakeholder

MessagingMessaging

Leadership Leadership DevelopmentDevelopment

Rewards & RecognitionRewards & Recognition

Crisis PreparednessCrisis PreparednessMeasurement PlanningMeasurement Planning

Foundation ConsultingFoundation Consulting

CurrentCurrentReputationReputation

Scorecards Scorecards

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CEO CAPITAL CEO CAPITAL NORWAY NORWAY 2005/20062005/2006

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The Norwegian companies included in the study

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Who are the respondents?

Toppledere

Analytikere/ Meglere

Journalister Media

Investorer

3

0

10

20

30

40

50

60

70

80

90

100

Executives

Financial analysts

Business journalists

Investors

Government officials

The only survey in Norway measuring reputation amongst Business Influentials

Source: Burson-Marsteller og Research International Topplederundersøkelse 2005

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Who are not the respondents?

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CEO Reputation

Company Reputation

The power of reputation

Profitability

- Share price- Revenue- Turnover

Other factors

- Alliance/ merger partner- Recruiting and retaining - Power

In business Politically

which influences

is responsible for 47 % of a

Kilde: Burson- Marsteller analyse; Burson-Marsteller/ Economist Global CEO Capital, 2005

A good reputation is a rapidly increasing success factor in today's society

Sum up

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What is the most important driver when deciding to invest in a company?

??

26Data: Tall i % av base: 135/88. Figuren viser andelen som har svart 9-10 på en 10-delt skala for betydning for valg

Quality of leadership and ability to adjust to change is the most important drivers when investing in companies

What is most important when deciding to invest in a company?

A trusted and good management is more important than financial situation

* Kilde: Burson-Marsteller og Research International Topplederundersøkelse 2005

Leadership

Adjust to change

Quality of productsand services

Credibility

Financial situation

Innovation

Specific skills or technology

Ability to recruit and retain

Loyal customers

Strong brand

Financial track record

Environmental focus

Social responsibility

2005

2003

48

47

38

38

31

29

28

27

21

16

14

10

8

40

25

38

42

25

13

17

26

29

22

23

11

12

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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Tall i % av base: 135/88. Figuren viser andelen som har svart 7-10 på en 10-delt skala for grad av påvirkning

To what extend does your opinion of a CEO affect your will to.....

2005

2003

In addition, the CEO reputation affects other key success factors for the company…

76

74

71

70

61

46

34

70

34

72

62

39

24

69

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Recommended as a alliance/merger partner

Believe in company despite negative media coverage

Potential employer

Buy stocks in the company

Believe in company despite share price develops below index

Be informed of company's development

Buy company's products and services


28

Is there a correlation between the CEOs reputation and the company's reputation?

??

29

There is a strong correlation between the CEOand the company reputation

The correlation proves that the trust in the CEO is crucial for a company’s reputation

Correlation


30

Big changes in companies reputation since 2003 shows that the reputation is in motion


0

25

50

75

100

0 25 50 75 100

Co

mp

an

y r

ep

uta

tio

n

Tall i % av base generelt inntrykk: 90. Figuren viser andelen som har svart 7-10 på en 10-delt skala for tillit (x-aksen) og andelen som har svart 7-10 på en 10-delt skala for inntrykk (y-aksen)

CEO Capital

Reputation is easily broken down in a crisis, but the reputation may be restored within 2 years

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Reputation recovery is possible, but demands focus

Data: Tall i % av base: Norge 107 som har svart, Globalt: Ca 600

2,2

3,2

Norway 2005

Global 2005

0 0,5 1 1,5 2 2,5 3 3,5 4

Comparison of the two studies shows that the time to recover the reputation is shorter in Norway than globally


Average in years

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What measures must be taken to build reputation?

??

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To build and sustain a company's reputation, the focus must be on ethics, good leadership and results…

Data: Tall i % av base: 135. Figuren viser andelen som har svart 5-6 på en 6-delt skala for viktighet

200587

79

79

78

76

74

73

71

66

64

55

54

53

52

52

49

14

12

Ethics

Trust in CEO

Financial results

Quality products and services

Customer focused

Attracts and retain good employees

Communicates effectively externally

Adjust to change

Corporate governance

Innovative

Social responsibility

Industry leading

A good place to work

Environmental

Stakeholder openness

Communicates effectively internally

Company size

Global company

0 20 40 60 80 100


The focus on ethics is very high in Norway compared to the global and European results

34Base: Tall i % av base: 135/88. Figuren viser andelen som har svart 9-10 på en 10-delt skala for viktighet

2005

2003

How important is it for your trust in the CEO that…

71

66

63

62

58

57

53

38

38

36

31

30

62

58

54

50

60

52

44

38

37

29

22

60

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100 %

Sets high ethical standards

Creates good financial results

Have a good management team

Have the ability to adjust to changes

Manage crisis in a credible way

Turn company's strategies into action

Informs of company's strategies and visionsto employees

Handles the media in a credible way

Focuses on customer relations

Retain and develops employees

Informs of company's strategiesand visions externally

Focuses on social responsibility

When the company reputation and the CEOs reputation depends on the same criteria, it shows how the company and the CEO is identified with each other

… the same criteria is also the most important to buildand sustain a CEOs reputation


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Data: Tall i % av base: 135/88. Figuren viser kilder der man lærer mest om den enkelte toppleder

Business newspapers are the most important communication channel for CEOs and companies

•TV, radio and the internet has become more important as a reputation communication channel the last two years due to a rapidly increasing focus in business news

•In addition, conferences, seminars and other meeting arenas has increased in importance

Fra hvilke kilder lærer du mest om toppledere?


http://www.business20.com/archives/0,1661,4,00.html?volID=340

http://www.chiefexecutive.net/mag/190/toc.html

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To build trust, a CEO must show the ability to take action within the first 6-8 months in the position…


Tall i % av base: 135/88

0 3 6 9 12 15 18 Months

Tall i parentes: antall måneders endring fra 2003

…to acquire the trust of the employees

7 months (0)

…to establish good relations for the

company

10 months (0)

…to improve the financial results

17 months (+1)

…to attract a management team

with the right competence

7 months (-1)

…to establish the company's visions

and strategies going forward

8 months (+1)

…to turn a negative trend around

15 months (+1)

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Do you believe that the chairboard fires their CEOs too fast?

Data: Tall i % av base: 135/88

20052003 In time

32%

Too early49%

Too late

16%

In time55%

Too early16%

Too late

30%

• Twice as many business influentials than in 2003 believes that CEOs should be fired earlier

• The percentage that believe the CEO should be given more time is down from 49% to 16%

The demands for the CEO ability to take action and show results are increasing


38

Zooming in on Norway's 2nd largest company


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Hydro has the best reputation amongst business influentials

Data: Tall i % av base inntrykk: 135/88. Figuren viser andelen som harsvart 7-10 på en 10-delt skala for inntrykk

2005

2003

88

78

78

72

72

69

56

53

46

41

39

33

27

25

16

13

79

50

27

73

60

24

28

42

12

78

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hydro

Hydro on top

Potential reasons:

• Good results

• Strong management

• High ethical standards

• High profile- 100 years

Company reputation


40

Hydro has a solid and evenly divided trustamongst key stakeholders

100

79

9093

81

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Hydro

Investors

Analysts

Journalists

Executives

Government

Investors have full confidence in Hydro, but Hydro should strengthen its position amongst governmental officials and analysts

Company reputation – divided by stakeholders


41

Hydro

Data: Tall i % av base: 135/88. Figuren viser andelen som harsvart 7-10 på en 10-delt skala for inntrykk

92

91

73

73

71

68

66

65

65

65

52

37

37

35

33

31

37

79

55

49

58

27

48

65

27

75

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

The Hydro CEOs reputation is the second highest amongst the measured companies

2005

2003

Eivind Reiten is amongst the countries most trusted leaders and has increased the trust the last two years

Trust in CEO


42

Eivind Reiten has a higher trust amongst analysts than the company itself (79% vs. 94%)

Media and governmental officials has the lowest trust amongst stakeholders

100

94

90

92

86

70%

80%

90%

100%

Hydro

The trust in the Hydro CEO varies more amongst the business influentials than of the company

Trust in CEO- Divided by stakeholders


Investors

Analysts

Journalists

Executives

Government

43

Tall i % av base : 88. Figuren viser andelen som har svart 7-10 på en 10-delt skala for tillit (x-aksen) og andelen som har svart 7-10 på en 10-delt skala for inntrykk (y-aksen)

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

Inntrykkav selskap

Tillit til toppleder

Trust in CEO and company reputation in 2003

Svært godt

Svært dårlig

Svært lav Svært høy

Hydro

Hydro had a high trust in both CEO and in company in 2003

Korrelasjonsområde


44

Hydro

Trust in CEO and Hydros reputation has increased further from 2003 to 2005

Hydro is number one

Danger- The only way is down

Korrelasjonsområde


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That’s all folks!

Applause

46

Back up

47

“In today’s world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward.”

Alan Greenspan

Federal Reserve Chairman


48

Hydros toppleder har meget høy kjennskap blant norske beslutningstakere

2005

2003

Data: Tall i % av base : 135/88. Figuren viser andelen som har svartkjenner svært godt/lite grann til

95

93

92

90

85

85

85

83

77

64

62

53

47

35

17

12

95

97

87

84

89

90

90

80

76

87

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hydro

Vår analyse viser at kjennskap er en forutsetning for topplederens tillit

Kjennskap til toppleder


49

Myndigheter og journalister har best kjennskap til Hydros toppleder

Hydro har lavest kjennskap blant meglere/analytikere, og forholdsvis lav hos investorer og andre ledere

Kjennskap til toppleder- fordelt på målgrupper

92

84

97

90

97

70%

80%

90%

100%

Hydro

Investor

Megler/analytiker

Journalist

Toppleder

Myndighet


50

Tilliten til toppleder versus kjennskap til toppleder

92

100

84

9497

90909297

86

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

Godt samsvar mellom kjennskap og tillit

Norske myndigheter har lavere tillit enn kjennskap til Reiten , mens det er omvendt for meglere og analytikere

Investor

Megler/analytiker

Journalist

Toppleder

Myndighet

KjennskapTillit

Tillit

TillitTillitTillit KjennskapKjennskapKjennskapKjennskap

Tillit til toppleder og kjennskap til toppleder - fordelt på målgrupper


51

Hydros omdømme viser en solid oppadgående trend fra 2001-2005

Tall i % av base inntrykk: 135. Figuren viser andelen som har svart 7-10 på en 10-delt skala for tillit (x-aksen) og andelen som har svart 7-10 på en 10-delt skala for inntrykk (y-aksen)

Inntrykkav selsk.

Tillit til toppleder

Hydro 2005 Svært godt

Svært dårlig

Svært lav Svært høy

Hydro 2003

Hydro 2001

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100


52

Hva tar vi med oss videre…

Hydros omdømme helt på topp ” The only way is down”

Tilliten til Hydros toppleder Eivind Reiten er forholdsvis ujevnt blant beslutningstakerne

Hydro bør fokusere mer på kommunikasjon mot myndigheter og media

Hydro kan fokusere mer på kommunikasjonen mot analytikere


53

Management Team Reputation Six out of ten worldwide business influentials (60%) believe the

reputation of the executive management team is more important now than it was two years ago.

60%

36%

3%

MoreImportant

Just asImportant

LessImportant

More important vs. two years ago

60% 58%64%

56%

70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Total Eur NA A/P LA

Importance of Executive Management Team Vs. Two Years Ago

54

Selskapets omdømme blir stadig viktigere, og tillit til toppleder er nå avgjørende for selskapets omdømme...

Vår globale undersøkelse viser at topplederen utgjør 47% av selskapets omdømme

* Kilde: Den globale undersøkelsen CEO Capital laget av Burson-Marsteller og The Economist (EIU), gjennomført høsten 2005

Hvor stor betydning har tilliten til en toppleder for din oppfatning av selskapet

55

Who Wants to Be CEO?

56

Who Wants to Be CEO?

TotalTotal Eur.Eur. NANA A/PA/P LALAWant to Be

CEO 46% 40% 36% 49% 73%

Do NOT Want to Be CEO

54 60 64 51 27

A majority (54%) of global business influentials do not want to be CEO.

Europeans (60%) and North Americans (64%) are less likely to want the job and Latin Americans are the most eager.


57

Why Want to Be CEO?

Rank*Rank*Enjoy complex problem-solving 1Directly affect the business 2Implement my ideas 3Help company go from good to great 4Build a company to last 5Make a difference in the world 6Build future leaders 7Contribute to employee well-being 8Earn generous compensation 9Reach the pinnacle of my career 10Serve in a prestigious position 11

Global business influentials believe solving complex problems is the most enjoyable part of being CEO. The top five reasons for wanting to be CEO reflect the desire to be involved in running the business at the deepest level.

SCORECARD

Latin America Enjoy complex problem-solving

Executives/ Financial Analysts Can directly affect the business

Media/Government Can directly affect the business

Media Get to build leaders

Compensation is generous

* Does not include CEO responses

58

Why Want to Be CEO?

Total*Total* Eur.*Eur.* NA*NA* A/P*A/P* LA*LA*

Enjoy complex problem-solving 1 1 1 1 1

Directly affect the business 2 2 2 2 2

Implement my ideas 3 3 3 4 4

Help company go from good to great 4 4 4 3 3

Build a company to last 5 6 6 5 6

Make a difference in the world 6 5 5 6 7

Build future leaders 7 9 7 7 5

Contribute to employee well-being 8 7 8 9 8

Earn generous compensation 9 8 9 8 9

Reach the pinnacle of my career 10 10 11 10 10

Serve in a prestigious position 11 11 10 11 11

Business influentials of all regions believe solving complex problems is the most enjoyable part of being CEO. Compensation and prestige are the least important factors to influentials, regardless of region.

= lower than total = higher than total * Does not include CEO responses

59

Why Not Want to Be CEO?

Rank*Rank*Too little work/life balance 1Too much focus on quarterly earnings 2Too much stress 3Too much public scrutiny 4Sarbanes-Oxley and other regulations 5Too much pressure to reduce costs 6Difficulty attracting and retaining talent 7Too many stakeholder demands 8Excessive media scrutiny 9Too much travel 10Too much board oversight 11Overly competitive business environment 12Diminished authority 13Compensation not worth the effort 14

The biggest concern about being CEO is the lack of work/life balance. Other prevalent concerns are the quarterly earnings focus, general stress and public scrutiny.

SCORECARD

North America/Europe Sarbanes-Oxley/ Regulations

Asia Pacific/Latin America Sarbanes-Oxley/ Regulations

Europe Too much pressure to cut costs

CEOs Work/life balance and public scrutiny

Attract and retain talent

* Does not include CEO responses

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Why Not Want to Be CEO?

Total*Total* Eur.*Eur.* NA*NA* A/P*A/P* LA*LA*Too little work/life balance 1 1 1 1 1Too much focus on quarterly earnings 2 3 2 2 4Too much stress 3 2 3 3 2Too much public scrutiny 4 4 4 4 3Sarbanes-Oxley and other regulations 5 6 5 7 9Too much pressure to reduce costs 6 5 6 8 7Difficulty attracting and retaining talent 7 9 7 5 8Too many stakeholder demands 8 7 8 6 6Excessive media scrutiny 9 8 9 9 10Too much travel 10 10 10 14 5Too much board oversight 11 11 11 10 14Overly competitive business environment 12 13 14 11 11Diminished authority 13 14 12 12 12Compensation not worth the effort 14 12 13 13 13

For all four regions, lack of work/life balance tops the list for reasons to not want to be CEO. Other prevalent concerns are the focus on quarterly earnings, general stress and public scrutiny.

= lower than total = higher than total * Does not include CEO responses

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CEO Reputation payoff in EuropeCEO Reputation payoff in Europe

TotalTotal EurEur NANA A/PA/P LALA

Pay attention to what a CEO has to say 1 1 1 1 2

Recommend company as good alliance/merger partner 2 3 2 4 1

Give a company more time to succeed 3 2 5 2 4

Maintain confidence in company when share price lags 4 4 7 3 5

Buy stock in a company 5 5 4 5 6

Believe a company under pressure from the media 6 7 3 7 8

Recommend a company as a good place to work 7 6 8 6 3

Recommend a company’s stock 8 8 6 8 7

Prefer a company’s products and services 9 9 9 9 9

Influentials in Europe report that CEO reputation has the greatest influence on their likelihood to listen to what a CEO has to say and recommend the company as the preferred partner.


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Profitability Vs. Social Responsibility Global business influentials believe that 74% of a company’s

responsibility is to make a profit and 26% is to advance societal interest. The debate over profit vs. corporate responsibility continues to be hotly discussed in the media.*

74%

26%% responsibiltyto make a profit

% responsibilityto advancesocietal interest

33%67%

25%75%

24%76%

27%73%

26%74%

0% 20% 40% 60% 80% 100%

LA

A/P

NA

Eur

Total

Profit Vs. Societal Interest

* “Social Responsibility: Do The Right Thing,” BusinessWeek, 15 August 2005

Profit Societal interest

CEO & Corporate Reputation

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