KUALA LUMPUR, 21 June, 2006 - CEOs in Malaysia place the need for profit growth and consistent execution of strategy at the top of their list of challenges according to a new survey of local chief executives released today by The Conference Board.
The Malaysia study is an extension of a survey of 658 global CEOs from 40 countries. The results, with comparisons between the local results and responses from CEOS in the US, Europe and Asia, were presented at a roundtable for CEOS on June 21, hosted by The Conference Board in partnership with Ernst & Young. Rainer Schultheis, Program Director for The Conference Board's Asia-Pacific CFO Council and moderator of the roundtable said "The thinking of Malaysia´s top executives is closely aligned with their global counterparts: achieving growth in revenue and profit are still the major concerns."
The top worry for CEOs worldwide is sustained and steady top-line growth, with 37.5% of those surveyed naming it their top challenge. In Malaysia, profit growth was followed by consistent strategy execution and sustained and steady top-line growth in a tie for the second greatest concern. Noteworthy for its importance to Malaysian CEOs was concern about top management succession. Ranked in sixth place in Malaysia, this concern did not figure in the top ten either globally or across Asia as a region.
The annual CEO Challenge Top 10 report from The Conference Board details specific challenges that CEOs face across regions, as well as by company size, industry, and level of success - all factors affecting the concerns of CEOs.
CEOs in Asia rank profit growth as their top concern (42.2%), followed closely by sustained and steady top-line growth (41.3%); speed, flexibility, and adaptability to change (41.3%); customer loyalty/retention (35.6%); speed to market (33.3%); and corporate reputation (33.3%).
CEOs based in Europe are most concerned with speed, flexibility, and adaptability to change (39.4%); followed by profit growth (38.4%); and sustained and steady top-line growth (37.0%).
In the U.S., the top four challenges are sustained and steady top-line growth (39.4%); consistent execution of strategy by top management (38.4%); customer loyalty/retention (37.0%); and profit growth (27.2%).
Across the globe, CEOs in a group of "more successful" companies were more likely to consider customer loyalty/retention as a chief concern. The report classifies 189 of the 658 companies as more or less successful based on their average return on assets. CEOs of "less successful" companies rank speed to market notably higher as a major challenge than the "more successful" firms and ahead of customer loyalty/retention. While lack of pricing power appears on the Top 10 list of CEOs´ concerns in the "less successful" firms, it doesn´t rank in the Top 10 concerns of "more successful" companies.
"Less successful companies are likely more concerned with speed to market because of their more pressing need to improve their business growth," says Linda Barrington, Research Director and Labor Economist at The Conference Board.
The Conference Board survey reveals a rising emphasis on challenges linked to increasing competitive pressure.
More CEOs than last year have increased the importance of faster speed to market, keeping up with new technologies, industry consolidation, seizing opportunities for expansion/growth in North and South America, outsourcing and facing non-traditional competitors in their business.
Security of/safeguarding plant/operations/employees also rose in the relative rankings, driven in part by the proximity of the survey to the July 7 London bombings.
Among those challenges falling in relative ranking over the past year are realizing gains from mergers/acquisitions/alliances, and vigilance on ethics. Cash management, short-term performance pressure, cost of capital, debt burden, and transnational regulation issues also fell.
Among the survey´s other key findings:
While product innovation is sixth in the Top 10 rankings of CEOs in both Europe and the U.S., it is only 25th among CEOs in Asia.
Sustained and steady top-line growth and consistent execution of strategy by top management were the top concerns of CEOs across all sizes of business.
Among the higher ranked challenges of CEOs of companies with more than $5 billion in worldwide sales are stimulating innovation/creativity/enabling entrepreneurship, and speed, flexibility, adaptability to change.
The Conference Board´s CEO Challenge Survey 2006 was conducted during July and August 2005. The Malaysian survey was conducted in June 2006. All findings and data in this report represent the accumulated experience of the senior executives surveyed. A subsequent report will explore the implications of this year´s survey findings as articulated by chairmen and CEOs of leading companies from a range of industries around the globe. Their perspectives were gathered through a series of in-depth interviews, in which the topics ranged from balancing short-term and long-term goals under the relentless pressure for speed, addressing uncertainty and risk, succession planning and the availability of skilled labor, to the backlash against global outsourcing, the impact of rising energy costs, and what we are likely to see in the next wave of mergers and acquisitions.
Source: CEO Challenge 2006: Top 10 Challenges
The Conference Board
About The Conference Board
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About Ernst & Young
Ernst & Young, a global leader in professional services, is committed to restoring the public´s trust in professional services firms and in the quality of financial reporting. Its 107,000 people in 140 countries pursue the highest levels of integrity, quality, and professionalism in providing a range of sophisticated services centered on our core competencies of auditing, accounting, tax, and transactions. Further information about Ernst & Young and its approach to a variety of business issues can be found at www.ey.com/perspectives. Ernst & Young refers to all the members of the global Ernst & Young organization.
About Ernst & Young in Malaysia
In Malaysia, Ernst & Young is one of the largest professional services firm with more than 2,200 employees in 18 offices in West and East Malaysia. It was established in the early 1900s and was one of the first internationally linked public accounting firms in the country. The Malaysian practice offers a range of integrated services to Malaysian companies, as well as to multi-national corporations operating in Malaysia. Ernst &Young provides solutions in Assurance and Advisory Business Services, Tax and Transaction Advisory Services. Further information about Ernst & Young Malaysia can be found at www.ey.com/my .