Investors question CEO credibility
It's no big surprise in the current environment: Recently viewed as working for stockholders, corporate CEOs are now seen by many US investors to be more interested in personal wealth.
Fifty-six percent of investors believe CEOs focus on their own pocketbooks, rather than long-term shareholder gain, when running their companies, according to a new survey from InsightExpress, an online market-research firm.
Unethical practices, they believe, are one result. Three out of 5 investors are convinced that companies purposefully withhold information from the public to maintain their stock price. More than half believe CEOs are fully aware of their firms' accounting and investment activities. Only 1 in 3 investors believes CEOs are trustworthy.
"The 'crises in confidence' that began with Enron have reached the point where investors do not feel that companies and more specifically their CEOs have investors' best interest at heart," says Lee Smith, president of InsightExpress.
Public awareness of corporate corruption has drawn more investor scrutiny of CEOs. Nearly 3 in 4 investors say the credibility of a CEO is key when deciding whether to purchase a company's stock. And 65 percent of investors believe it is likely that there will be more "Enron-like" situations within the Fortune 500 before year's end.