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CEOs Have Only Five Fiscal Quarters to Prove Themselves, According to New National Study of Business Influentials.

'Building CEO Capital' Study Also Reveals

Primary Reasons Why CEOs Fail

NEW YORK, Oct. 25 /PRNewswire/ --

Today's CEOs have little time to prove themselves, according to a new national study released by international communications consulting firm Burson-Marsteller. Building CEO Capital, the 3rd study of influential business stakeholders since 1997, reveals that today's CEO has only five earnings quarters on average to prove him or herself. The study also cited "the inability to execute well" and "a lack of strategic vision" as the top two reasons for CEO failure. According to Wall Street, a CEO's inability to execute well far exceeds any other reason.

In addition, the Burson-Marsteller study of 1,155 U.S. chief executives, senior managers, financial analysts, institutional investors, business media and government officials confirms that the reputation of the CEO contributes heavily to how companies are perceived today. Nearly half (48%) of a company's reputation is attributed to a CEO's reputation. This is a dramatic rise of 20% from 40% in 1997. This trend is not isolated to the United States. The companion survey among influential stakeholders in the United Kingdom confirms the U.S. findings with 49% attributed to the CEO.

"CEO reputation matters the world over," said Christopher Komisarjevsky, President and CEO of Burson-Marsteller worldwide. "Four years of research confirms that the CEO is arguably a company's most critical intangible asset driving the brand and the reputation of the company both internally and externally."

There are significant returns on investment in CEO reputation. Nearly all business influentials reported that CEO reputation influences their decisions to invest in a company (95%), believe a company under pressure from the media (94%), recommend a company as a good alliance/merger partner (93%), and maintain confidence in a company when its share price is lagging (92%). Moreover, business influentials are more likely to recommend a company as a good place to work (88%) if the CEO is favorably regarded.

"The job of chief executive officer is exceedingly complex and increasingly short-lived," said Dr. Leslie Gaines-Ross, chief knowledge and research officer of Burson-Marsteller. The study, conducted with RoperASW, also found that new CEOs are given, on average, eight months to develop a strategic vision, 19 months to increase share price and 21 months to turn a company around."

What actions can CEOs take to build and better manage his or her reputation? The new study cited credibility, ethical standards and good internal communications as the leading three drivers of CEO reputation. Credibility has increased in importance since 1997. "Delivering on promises made is an integral part of how CEOs build and sustain reputation today," remarked Dr. Gaines-Ross. "Furthermore, in light of the events of September 11, good CEO communications was put to the highest test as most Americans first heard the tragic news in the workplace. Many employees had a chance to re-evaluate the effectiveness of their CEO's ability to communicate clearly and sincerely."

Overall, five factors are cited as critical in building CEO Capital:

1. Being believable

2. Demanding high ethical standards

3. Communicating a clear vision inside the company

4. Maintaining a high quality top management team

5. Motivating and inspiring employees

Surprising to some, increasing shareholder wealth was not among the top five drivers for building CEO reputation. "Financial performance is often considered a given and a price of entry for CEO favorability," says Gaines-Ross. "It is necessary but clearly not all there is to building an admirable CEO reputation."

For more information on CEO Capital and the leadership issues facing CEOs, please visit the Web site, http://www.ceogo.com. The purpose of this Web site is to join together a community of people interested in chief executive officers -- their reputations, changing roles, comings and goings and management strategies. The Web site offers a variety of information, including results from numerous research studies, advice from CEOs, and a bibliography of valuable resources on a variety of management topics.

About Burson-Marsteller

Burson-Marsteller (http://www.bm.com), established in 1953, is a leading global public relations and communications counseling firm. It provides its clients with strategic thinking and program execution across a full range of public relations, public affairs, advertising and other communications services.

Burson-Marsteller, through its proprietary research, today leads the industry in its knowledge of and insights into the relationship between communications and the reputations of companies and their CEOs. These learnings are applied to the firm's many and varied corporate and institutional clients.

The firm has 75 offices in 34 countries, through which it links approximately 2,000 professionals in a seamless global network and unified culture. In 1979, the firm joined the Young & Rubicam family of companies, which in October 2000 was acquired by WPP Group plc, one of the world's leading communications services groups.

About RoperASW

RoperASW, with offices in the U.S., Europe and Asia, is a leading provider of world class market research. For more information, visit http://www.roperasw.com. RoperASW is part of NOP World, one of the world's largest market research companies.

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Date:Oct 25, 2001
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