Chief executives change their approach to risk
New Zealand chief executives have taken a greater interest in risk management since the recession with 79% having changed their approach according to the PricewaterhouseCoopers 13th Annual Global CEO Survey.
For the first time, PricewaterhouseCoopers (PwC) New Zealand carried out its own extensive survey of New Zealand chief executives, seeking the views of 72 of the country's top leaders in both the public and private sectors.
PwC says a key finding of the survey released at the World Economic Forum in Davos, Switzerland, today was that with the challenges of New Zealand's prolonged recession behind them, chief executives are confident their organisations are emerging stronger and are more optimistic about the future.
"They believe the decisions they have made, including cost reduction initiatives that were implemented by 98% of organisations, have put them in a better position for growth as they now enter the recovery phase."
PwC chief executive officer, Bruce Hassall says PwC was interested to see how New Zealand organisations fared during the recession, and how the New Zealand overall economy has performed when benchmarked against countries around the world
"New Zealand companies have displayed real vision in tackling the challenges of the past year which means they are in a much leaner and more productive shape than they were when the recession hit."
He says chief executives believe there are opportunities for growth in the next year, yet the volatility of the New Zealand dollar and commodity prices were seen as key indicators that demand may not come back strongly.
The survey also found that like their worldwide counterparts, New Zealand chief executives predict there is more regulation on the horizon as governments move to protect the public from further financial vulnerabilities.
There was division among chief executives as to whether new regulations would be an issue, and 44% believed over-regulation was a threat to business growth. However, most acknowledged that there were some positive aspects to regulation and identified the finance sector as an area where new policies would be welcome.
Another area that chief executives generally considered as key was focusing further on their employees.
"CEOs have noticed record levels of employee productivity and engagement," Hassall says.
"Staff training and development has been on top of chief executives' agenda with 75% planning to invest in leadership and talent development over the next three years."
A number of New Zealand public sector organisations were also included in the survey and chief executives of these organisations noted that the recession had forced the public sector to focus on commerciality and efficiency with increased pressure on state owned enterprises to perform financially against publicly listed equivalent benchmarks.
Some had taken a strategic shift towards performance improvement and had explored the benefits of public/private sector partnerships.
Hassall says overall, New Zealand chief executives expressed the view that 2010 is crunch time for New Zealand and for the government.
"This is the year where game changing policies need to be rolled out to lift growth and productivity and to incentivise people to work and invest wisely."
Hassall says this year's government budget, due in May, needs to be a landmark document.
PwC anticipates significant announcements in key policy areas including regulation, infrastructure, business innovation, education and tax.
Hassall says among the fundamental issues raised by chief executives was the need for government to address confidence levels in the investment market, widen the tax base, and encourage New Zealanders to save.
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