On Opportunities and Risks

• Current U.S. conditions are fair or poor, say 90 percent of U.S. CEOs, versus 16 percent who felt that way last year.
• Operational efficiency is the greatest internal factor affecting profit growth through 2009 (82 percent).
• Management is cited as a top internal factor affecting both profitability (72 percent) and revenue growth (71 percent). Also high on both lists are new product development, new technology and strength of brand.
• Regulation, although rated high (by 84 percent) as an external factor affecting growth, is down from 89 percent in last year’s survey and 91 percent in 2006.
• Economic factors will have the greatest impact on overall growth through 2009, with more than nine of 10 CEOs citing the U.S. economy (94 percent), global economic conditions (92 percent) and inflation/the cost of capital (91 percent).
• Most respondents expect budget increases in energy (62 percent), technology (58 percent) and raw materials (55 percent); fewer than half (49 percent) expect to spend more on health care, compared with 66 percent last year.
• Interest rates have the greatest influence on business planning (71 percent), followed by energy rates (57 percent), foreign exchange rates (56 percent) and GDP (53 percent).

On Governance and the CEO Role

• The CEO role is more rewarding than it was three years ago (60 percent), up from 53 percent last year. More non-U.S. CEOs are satisfied with their job (81 percent) than those headquartered in the U.S. (52 percent).
• The CEO job is more time-consuming than it was three years ago (95 percent). Most are spending more time on shareholder relations (63 percent), setting strategy (62 percent) and reporting to the board (61 percent).
• Overall company profitability is the most cited measure used to compute executive bonus plans (92 percent); overall revenues is a distant second (42 percent).
• Changes to the American legal and regulatory systems would increase the competitiveness of U.S. capital markets (94 percent of U.S. CEOs and 79 percent of non-U.S. CEOs).
• Sustainable growth is cited most often as the performance measure considered most crucial to long-term success of a CEO (54 percent), followed by stock appreciation (17 percent).

On Stakeholders

• It’s easier to attract customers (36 percent), investors (40 percent) and employees (35 percent) than it was three years ago. It’s also easier to retain customers and employees, although 35 percent find retaining investors harder.
• Good management has the most influence on retaining staff (80 percent), followed by internal employee-training programs (63 percent) and cash bonuses/stock incentives (51 percent).
• To control health-care costs, most companies are using wellness programs (72 percent), establishing employee-paid flexible spending accounts (69 percent) and raising employee deductibles and employee premiums (both 58 percent).

On Globalization

• For the fourth consecutive year, the U.S. is cited as the most important region (66 percent), followed by China (9 percent) and Western Europe (9 percent). In fact, most CEOs (90 percent) view the U.S. as crucial or important to their businesses.
• Brazil, Russia, India and China (BRIC) are viewed as opportunities rather than threats (63 percent).
• Half (47 percent) plan to establish or expand local marketing and sales activities in BRIC countries through 2009; one-quarter will seek or expand local partnerships.

On Reputation Management

• CEOs say they are doing enough to protect their companies’ reputations (78 percent), but only 44 percent of U.S. adults agree.
• CEOs attribute improved corporate behavior to company executives and corporate practices (67 percent), while U.S. adults cite government actions and regulation (51 percent).