The CEOs are optimistic about the future. Over 90% express confidence in their companies? prospects for revenue growth over the next 12 months. In response to low-cost competition, nearly 40 percent of the CEOs are engaging in off-shoring or planning to do so. While these CEOs see the benefits of off-shoring, they also perceive risks.

27 January 2005 ? Ask five experts to assess the global economy, and they are likely to provide as many different answers. Whether related to trade imbalances and currency fluctuations or to skyrocketing energy costs and increasing regulations, uncertainties abound. Yet the CEOs in this survey are optimistic about their prospects for growth and are investing today in secure future success. Is their optimism unbridled? No. It is an optimism grounded in reality and tempered by caution.

Off-shoring has become an established practice among 28 percent of the CEOs questioned, and another 11 percent, not currently off-shoring, plan to do so in the future. Off-shoring is a global phenomenon. While 21 percent of USs companies are engaging in off-shoring, 25 percent are doing so in Europe, 35 percent in South America, and 31 percent in Asia. However, US companies and South American companies (27 percent and 36 percent, respectively) are more likely to off-shore to third parties that are European and Asian companies (24 percent and 23 percent, respectively).

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 Price Waterhouse Coopers? 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 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 Price Waterhouse Coopers. «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.

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 Mineração (CBMM); Captain Wei Jiafu, President and CEO, COSCO Group;

For the eighth edition of Price Waterhouse Coopers? 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 Price Waterhouse Coopers 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 Price Waterhouse Coopers 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.

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.

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.