Survey: Majority of Fortune 1000 Executives Support Financial Reform

A new survey from PR and investor relations agency Makovsky + Co reveals that a majority of Fortune 1000 executives support financial reform. In fact, only 28% of senior executives, on average, believe proposed financial reform legislation will have a negative impact on the U.S. economy. The survey, commissioned by Harris Interactive, also found the following: 72% support regulating credit rating agencies 69% agree with proposals to close regulatory loopholes for derivatives and other complex investment packages 68% support the creation of a consumer protection agency 66% back the formation of a new regulatory agency to assess risk at financial institutions 66% agree with strengthening bank supervision "Given the backdrop, and the fact that the survey also shows that 64% of executives believe the U.S. is on the wrong track, the financial crisis and slow economic recovery may still be at the root of executive concerns, thereby correlating with their support for financial reforms as a remedy," said Scott Tangney, Executive Vice President and head of the financial and professional services practice at Makovsky + Company. Makovsky counts Citibank-Citicorp, JPMorgan Chase and Merrill Lynch as clients. Full release after the jump. CORPORATE AMERICA SUPPORTS MOST FINANCIAL REGULATORY REFORMS, MAKOVSKY STUDY SHOWS Only an Average of 28% of Fortune 1000 Executives Surveyed by Harris Interactive Believe Reforms Will Have a Negative Effect on U.S. Economy; Could Affect Mid-Term Vote New York, NY (May 6, 2010) - As Congress continues to debate the most sweeping financial regulatory overhaul since the Great Depression, leaders at Fortune 1000 corporations are weighing in. According to a Makovsky + Company study released today, Corporate America favors the proposed financial reforms, and additionally, across all 8 reforms about which they were queried, only 28% of senior executives, on average, believe the proposed legislation will have a negative impact on the U.S. economy. Commissioned by Makovsky + Co., a leading global, independent public relations, investor relations and branding firm headquartered in New York City, and conducted online by Harris Interactive in April 2010, the survey of Fortune 1000 executives found that they generally support 6 of the 8 core proposals for regulatory reform*. More specifically: 72% support regulating credit rating agencies 69% agree with proposals to close regulatory loopholes for derivatives and other complex investment packages 68% support the creation of a consumer protection agency 66% back the formation of a new regulatory agency to assess risk at financial institutions 66% agree with strengthening bank supervision 56% support the Volcker Rule The reform that registered the greatest opposition, with 43% of executives opposing, was the right of the government and shareholders to influence senior executive compensation. The reform that had the least support, at 50%, was the Resolution Fund, a government process for shutting down large troubled firms viewed as "too big to fail." The latter two reforms, executives believe, would also have the greatest negative impact on the U.S. economy. With the exception of these two reforms and the Volcker Rule, slightly less than half believe the proposed reforms will have a positive effect on the economy and almost an average of 20% believe it will have no effect at all. The "executive pay" reform, corporate leaders believed, also would have the greatest negative impact on their particular corporation (40%) as well as them personally (34%). "Given the backdrop, and the fact that the survey also shows that 64% of executives believe the U.S. is on the wrong track, the financial crisis and slow economic recovery may still be at the root of executive concerns, thereby correlating with their support for financial reforms as a remedy," said Scott Tangney, Executive Vice President and head of the financial and professional services practice at Makovsky + Company. While the large majority of executives were aware of most of the reforms, they were least aware of the following: the Volcker Rule (56%), the Resolution Fund (55%), and Systemic Risk Regulation (54%). *See page 2 for how reforms were defined to respondents. Asked if the reforms would make executives vote differently in the upcoming elections if they were passed, the data reflected overall uncertainty. An average of 30% felt it would make a difference, an average of 43% said it would not, and nearly one-quarter were unsure. Specifically, the study revealed, 37% of executives would vote differently if there were regulatory changes regarding government and shareholder influence on executive compensation, 32% would vote differently if bank supervision was strengthened, and 32% would change their vote if there was the creation of a consumer protection agency. In contrast, 41, 45 and 46% said the passing of these reforms, respectively, would not make a difference in their vote in the upcoming elections. About the Survey Harris Interactive conducted the survey online within the United States between April 6 and April 16, 2010 among 300 Fortune 1000 Executives. The complete methodology and survey data are available upon request. How the Reforms Were Defined to Respondents Bank supervision: Reorganize and strengthen supervision of the nation's banks. Closing regulatory loopholes: Regulate over-the-counter derivatives, hedge funds, and brokers of mortgage-backed securities. Consumer protection: Creation of a financial consumer protection agency to regulate mortgages, credit cards, and other financial products Credit rating agencies regulation: Creation of a new Securities and Exchange Commission (SEC) Office of Credit Rating Agencies that would be responsible for strengthening regulation of credit rating agencies and setting up penalties for poor performance Executive pay and shareholder rights: Increase independence of corporate compensation committees, and give regulators and shareholders greater influence in electing directors and making decisions about executive pay. Resolution fund: Develop a new government process for shutting down large, troubled firms that are viewed as "too big to fail." Systemic risk regulation: Creation of a new regulatory agency to monitor the financial landscape, assess risk, and manage threats to stability before they cause another crisis. Volcker rule: Prohibit banks from proprietary trading and hedge fund ventures, and empower regulators to mandate large firms that are in distress to halt or divest risky businesses. #### About Makovsky + Company Founded in 1979, Makovsky + Company (www.makovsky.com ) is one of the nation's leading independent global public relations, investor relations and branding consultancies, focused in financial services, professional services, health care, technology, energy and branding and interactive. The firm attributes its success to its original vision: that the Power of Specialized Thinking is the best way to build reputation, sales and fair valuation for a client. Based in New York City, the firm has agency partners in more than 25 countries and in 35 U.S. cities through IPREX (www.IPREX.com), the second largest worldwide public relations agency partnership, of which Makovsky is a founder.

Social Pro Daily

Survey: Majority of Fortune 1000 Executives Support Financial Reform

Joe Ciarallo

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Joe Ciarallo