Call for honest CEOs, not driven only by profit

Honesty, ethics and fairness are more important than financial performance for chief executives, a global survey has found.

Public relations agency Ketchum polled 2,750 "influential people" in 11 countries including China to gauge trust in corporations and their chief executives.

Ketchum defines influential people as the 10 to 15 percent of the population who initiate change in their community or society, not including government officials.

Those polled in China and the developed nations of Europe and the United States shared similar expectations about the role of a corporate leader extending beyond financial performance and crisis communication.

The survey found employee relations and communications are the areas CEOs need to improve on the most.

"Ketchum's global survey clearly defines Chinese influential people's expectations on both corporations and CEOs in the current phase of China's economic transition," Chris Liu, partner and executive vice-president of Ketchum Greater China, said.

"The results show that in China's rapidly changing environment, employees want to know where their companies are going. Corporations and company leaders are expected to fulfill ethical responsibilities toward employees, communities and the environment."

Chinese respondents said CEOs need to champion employees, be creative, visionary and strategic to build and maintain their businesses.

Philanthropy, aggression and ethics were also highlighted as necessary qualities for CEOs.

Hong Kong tycoon Li Ka-shing topped the list of most-admired CEOs in China. Nearly 30 percent of Chinese respondents voted for Li. Warren Buffett trailed with 9 percent of the vote.

Generating profits, creating shareholder value and innovation were the only areas where corporations met respondents' expectations.

Across the board, respondents said corporations should be environmentally aware, honest, ethical and put people - employees, consumers and communities - ahead of profit.

But corporations often fail to meet those expectations, according to the survey.

The gap between expectation and reality was particularly pronounced for ethics. Chinese respondents said ethical standards are as important as compensating employees fairly.

The majority of respondents, or 70 percent, said CEOs should invest in research and development. Respondents also said CEOs should invest in higher pay (31 percent), lower consumer prices (32 percent) and environment-friendly technology (33 percent).

But 71 percent of Chinese respondents said the scale of CEO salaries is a significant concern.

More than 80 percent of Chinese respondents said they believe the job of CEO is getting harder due to increased public scrutiny and demanding shareholders.

But 70 percent said they would still welcome the opportunity to be a CEO of a large corporation. Respondents in developed countries, however, said CEO pay is too high and considered the position undesirable.

In China, trust in media, government and large corporations is significantly higher than in the UK, the US, Canada and Germany.

China was the only nation that ranked government among its most trusted institutions. No country surveyed put corporations at the top of the trusted list.

"Integrating social and environmental benefits with business profitability has become a popular strategy for corporations in China," Liu said.

"The survey shows that Chinese influential people want to hear less about the economy and more about what company leaders should do for society and the environment. The call for corporate social responsibility in China is therefore steadily escalating."

(China Daily 02/29/2008 page15)