PricewaterhouseCoopers' CEO Survey: Compliance Focus Inhibiting Risk Taking This year, more than two-thirds (68 percent) believe the current environment is making companies risk averse, according to PricewaterhouseCoopers' Seventh Annual Global CEO Survey.
More than 9 in 10 U.S. CEOs are confident about their prospects for revenue growth over the next 12 months -- with 37 percent saying they are "very confident" and 85 percent say they will meet or exceed their profit targets this year.
But almost four in ten (39 percent) think the business environment is riskier now than it was a year ago. And a large minority (44 percent) acknowledges that their own companies are less risk-oriented than they were 12 months ago. In fact, only 5 percent of U.S. CEOs say they are taking significantly more risks, with fewer than 4 in 10 (39 percent) saying they are taking "somewhat" more risks.
The survey also found that U.S. CEOs see overregulation as a big threat, with almost half (49 percent) voicing that concern.
"American CEOs are concerned about risk, a reasonable reaction to Sarbanes- Oxley. Many are extremely focused on compliance," says Dennis Nally, chairman and senior partner of PricewaterhouseCoopers LLP, the U.S. firm of the worldwide PricewaterhouseCoopers organization. "And while they recognize its importance, they are not yet certain compliance is fully embedded in their organizations."
The data confirms this: While almost two-thirds (65 percent) of U.S. CEOs recognize the importance of monitoring compliance-related performance, costs and ROI, only one in four (26 percent) rate their organization's ability to monitor these indicators as very good. Furthermore, only 42 percent are very confident that compliance requirements are being communicated appropriately to management and other employees, and only 36 percent are very confident they are understood by management and other employees.
"Until CEOs feel they have their new compliance responsibilities under their belts, they will be understandably reluctant to take on new risks," notes Mr. Nally. "And only then will they begin to see that compliance -- along with good governance and risk management is the foundation for smart risk-taking."
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