Governance Troubles and Heroic Leadership

1. Many board directors do not understand the complexity of their firms’ businesses.

A quarter of major US business leaders claim that their boards do not fully understand the complexity of their firm’s business.

2. Almost 75% of CEOs strongly agree they have high confidence that the results provided by their external auditors are accurate.

3. CEOs overwhelmingly trust the integrity of their management teams, but are less sure of their competence.

While 24% of CEOs strongly agree that they have the right management team in place, 68% strongly agree that they trust their integrity.

4. Almost all CEOs (95%) agree they were well prepared for the challenges of being the CEO.

5. Only 26% of CEOs agree that "great leaders are born versus made." The more CEOs believe in "born leadership" the less they increase capital investment in their production capacity, and the more they invest in acquisitions.

Confidence in National Economic System

6. US CEOs have strong confidence in the security of the nation’s defense system and financial system, but low confidence in the nation’s communications, energy, transportation, and healthcare systems.

While 73% agree they are confident in the security of nation’s defense system and 68% agree they are confident in the nation’s financial system, only 40% of CEOs say they are confident in the nation’s communications systems; 34% confident in the energy and transportation systems; and 31% in the nations healthcare systems.

7. Roughly half of CEOs have a high degree of confidence in the nation’s political leadership to address domestic and international challenges with somewhat more confidence in the political leadership’s handling of international challenges (75% agreement) versus domestic challenges (57% agreement).

8. Roughly half of CEOs have a high degree of confidence in the nation’s corporate leadership to address domestic and international challenges with somewhat more confidence in the corporate leaders’ handling of domestic challenges (53% agreement) versus international challenges (47% agreement).

Confidence In CEOs’ Own Businesses

9. US CEOs show strong confidence in their own businesses yet many feel this will come from more than reliance on current core products and services.

71% of CEOs are very positive about the overall prospects for their firms in the coming year; only 52% think that there will be an increase in global demand for their core products and services; and only 49% anticipate increases in current production.

10. Investments in people and acquisitions will exceed investments in technology.

35% of CEOs anticipate spending more on technology in the next year while 60% plan to increase people development and 40% on increased hiring; 46% plan to build their businesses through acquisitions while 53% do not expect to grow through acquisitions.

Methods

Between April 15 and April 26, 2002, 130 CEOs of the 1000 largest firms in the United States were randomly surveyed through direct password coded email and numbered fax surveys. The questions were designed jointly by survey research experts of The Gallup Organization and the leadership experts at the Yale School of Management’s Chief Executive Leadership Institute. Respondents showed a balanced distribution across size, region, and industry. All respondents were assured anonymity in the reporting results.

The Yale School of Management’s Chief Executive Leadership Institute is the nation’s only such academic institute devoted to chief executive leadership. Founded twelve years ago and run by Dr. Jeffrey Sonnenfeld, Associate Dean of the Yale School of Management, The Institute conducts leadership research and offers well known problem solving conferences for top leaders.

The Gallup Organization is a privately held, employee-owned corporation founded as The American Institute of Public Opinion in 1935 by the late Dr. George H. Gallup. The organization, currently led by James Clifton, chairman and chief executive, continues as a polling organization specializing in social and political research, and customer audits. Gallup is best known for public opinion polling and management research and consulting.