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The most positive outcome of the Sarbanes-Oxley Act and NYSE governance rules, according to 30 percent of respondents, is that board members are more engaged, while a similar number (27 percent) cite improved investor confidence. Further, nearly all (95 percent) feel their boards of directors possess greater depth of information, and nine out of 10 CEOs say they have a positive relationship with their boards.
Still, nearly all (97 percent) bemoan the increased expenses they suggest come with compliance. One-third (34 percent) say that today they spend at least twice as much to comply with regulatory requirements as they did three years ago. Nearly four in 10 (39 percent) suggest higher compliance costs have resulted in delays and/or cancellations in their efforts to grow their businesses. Two-thirds (64 percent) say strategic planning has been affected, and more than half (56 percent) indicate infrastructure has suffered.
Compared with three years ago, many CEOs reveal that their role is less fun (66 percent) and less rewarding (55 percent). Nearly all say being CEO involves greater personal legal risk (99 percent) and is more time consuming (96 percent).
How are business leaders spending their time? Nearly nine out of 10 (89 percent) say regulatory issues take up more of their day, with reporting to the board a more time-consuming task for 72 percent.
By a large margin, 58 percent of respondents consider sustainable growth their most crucial measure of long-term success. Stock appreciation came in second with 22 percent of the vote.
When it comes to attracting investors, compared with three years ago, the majority of CEOs (56 percent) think it is easier to attract them; four in 10 say it is easier to retain them. In general the CEOs say investors are more interested in short-term measures as indicators of a company’s health, among them: earnings-per-share growth and cash flow from operations (both cited by 58 percent of respondents), free cash flow (57 percent), operating income growth (56 percent) and net income growth (53 percent).
Nine out of 10 CEOs (91 percent) expect the regulatory environment will have an impact on growth through 2007, with nearly the same number (89 percent) citing the expected impact of energy costs.
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