January 26, 2005 05:00 ET

PricewaterhouseCoopers' Eighth Annual Global CEO Survey

Benefits Include Enhanced Brand Reputation and Shareholder Confidence Attention: Business/Financial Editor NEW YORK--(CCNMatthews - Jan. 26, 2005) -

Governance, Risk Management and Compliance: Significant
Benefits Outweigh the Costs, According to
PricewaterhouseCoopers' Eighth Annual Global CEO Survey

Benefits Include Enhanced Brand Reputation and Shareholder
Confidence, but CEOs Struggle with Implementation

Building robust corporate governance systems and processes,
managing risk on a global scale, and complying with an
increasingly vast web of regulatory requirements is difficult,
costly and time consuming work; however, according to
PricewaterhouseCoopers' Eighth Annual Global CEO Survey, CEOs,
worldwide, think it is well worth the effort.

Of more than 1,300 CEOs, 43 percent consider governance, risk
management and compliance (GRC) a value driver and a source of
competitive advantage, and 56 percent believe that it has a positive
effect on reputation and brand. However, responses indicate that
effective governance, risk management and compliance are not easily
achieved and that CEOs are struggling with their implementation.

"Over the last three and a half years, CEOs have focused on complying
with new laws and regulations, putting new risk management processes in
place and strengthening corporate governance procedures," said Samuel
A. DiPiazza, Global Chief Executive Officer of PricewaterhouseCoopers.
"This has not been an easy task, but for CEOs who view these changes as
investments rather than costs, the payoff has been well worth the
effort -- specifically, when measured in terms of performance
improvement, greater transparency and movement toward a more
sustainable enterprise."

The survey shows that there are clear benefits to effective GRC;
however, responses overwhelmingly demonstrate that CEOs face numerous
challenges when it comes to implementation and, ultimately, to
realising these benefits.

While a majority of CEOs surveyed are confident that they can respond
to governance, risk management and compliance issues in their domestic
operations, only one quarter say they can very effectively respond to
foreign laws and regulations and to internal policies and procedures in
foreign business units.

The survey also shows that CEOs are struggling with effective
implementation. While 53 percent feel that codes of conduct are fully
developed in their companies, far fewer believe that their compliance
and ethics training programs meet the same standards. A third of CEOs
feel that their measurement of performance in these areas is not
well-developed if at all.

The majority of CEOs surveyed, however, recognize that governance, risk
management and compliance have a positive effect on reducing legal
liabilities (64 percent) and on enhancing reputation and brand.
Additionally, the 58 percent of CEOs who consider GRC expenditures an
investment see greater benefits than those who view it as a cost. These
executives believe that GRC is a value driver, a source of competitive
advantage, and an aid in enabling them to take risks to create value.

"There is no question that CEOs have a long way to go when it comes to
effectively implementing GRC. And, while our survey shows that CEOs
widely recognise the benefits, they must realise that only those who
implement GRC in a meaningful way will see a clear return on
investment, specifically as it relates to higher shareholder value,"
said DiPiazza.

In this report, four global business leaders provided in-depth,
personal perspectives on how they and their organisations are meeting
the challenges of GRC. These leaders include:

-- Leif Johansson, President and CEO, Volvo Group
-- Michael McCallister, President and CEO, Humana Inc.
-- Fernando Roberto Moreira Salles, CEO, Companhia Brasileira de
Metalurgia e Mineracao (CBMM)
-- Captain Wei Jiafu, President and CEO, COSCO Group

PricewaterhouseCoopers ( provides industry-focused
assurance, tax and advisory services for public and private clients.
More than 120,000 people in 144 countries connect their thinking,
experience and solutions to build public trust and enhance value for
clients and their stakeholders.

"PricewaterhouseCoopers" refers to the network of member firms of
PricewaterhouseCoopers International Limited, each of which is a
separate and independent legal entity.

(C) 2004 PricewaterhouseCoopers. All rights reserved.

-- Editor's Note: Executive Summary Available Upon Request

Survey Methodology

For the eighth edition of PricewaterhouseCoopers' Global CEO Survey,
1,324 interviews with CEOs were conducted throughout the world between
September and November 2004. The majority of interviews were conducted
on the telephone, with regional exceptions in Japan, where a postal
survey was administered, and in China, Kenya, and Nigeria, where
face-to-face interviews took place. The research effort was coordinated
by PricewaterhouseCoopers International Survey Unit, located in
Belfast, Northern Ireland, in close cooperation with a team of project
managers and members of a global advisory board of
PricewaterhouseCoopers partners.

By region, 392 interviews were conducted in Europe, 224 in the United
States (plus, in North America, 80 in Canada and 39 in Mexico), 257 in
South America, 297 in the Asia-Pacific region, and 35 in Africa. By
industry, financial services companies represent 18 percent of the
interviews; technology and media companies represent 10 percent; and
companies in the products sector (consumer and industrial products
manufacturers, distributors, and retailers) represent 72 percent.

Twenty-seven percent of the respondents' companies earn revenues in
excess of $1 billion; 13 percent earn $500 million to $1 billion; 51
percent earn less than $500 million; and 9 percent offered no
information. Regionally, the highest concentration of companies earning
more than $1 billion is in Europe (37 percent), followed by
Asia-Pacific (32 percent), and the U.S. (30 percent).

The vast majority of survey participants report revenue growth over the
last three years, with the largest number of CEOs being in the 5
percent to 10 percent range. Sixteen percent indicate revenue growth of
more than 20 percent; 21 percent report 11 percent to 20 percent
growth; and 23 percent are in the 0 percent to 4 percent range. Only 6
percent of respondents report negative growth.

Regarding earnings over the same period, the largest number of
respondents (26 percent) report growth in excess of 20 percent.
Twenty-two percent indicate growth of 11 percent to 20 percent; 23
percent report 5 percent to 10 percent growth; and 24 percent are in
the 0 percent to 4 percent range. Only 6 percent of respondents report
negative earnings growth.

Forty-one percent of respondents serve on boards of directors other
than their own. Of these, 10 percent serve on more than five boards, 7
percent on five, 11 percent on four, 15 percent on three, and 28
percent on one. The largest number of CEOs (29 percent) serve on two
other boards. /For further information: Jonathan Tsucalas Porter Novelli for PricewaterhouseCoopers (212) 601-8267/ IN: ECONOMY, FINANCE

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