Monday, July 10th, 2006

The Most Important Non-Financial Factors Ranked By Investors

Nowadays, with the prevalent of accounting fraud and the increasing rising trend of good corporate governance, investors do not only take profitability as the sole weight in assessing your company.

According to survey done by Ernst & Young, the following are the most important non-financial factors ranked by investors:

  1. Execution of Corporate Strategy
  2. Management Credibility
  3. Quality of Corporate Strategy
  4. Innovativeness
  5. Ability to attract and retain talented people
  6. Market Share
  7. Management Expertise
  8. Alignment of Compensation with Shareholder interests
  9. Research Leadership.
  10. Quality of Major Business Processes
  11. Customer Satisfaction Level
  12. Performance-based Compensation Policies
  13. Brand Image
  14. New Product Development Efficiency
  15. Customer-perceived Quality
  16. Quality of Organizational Vision
  17. New Product Development Cycle Time
  18. Quality of Workforce
  19. Repeat Sales Level
  20. Percentage of Revenue Derived from New Products
  21. Strength of Marketing & Advertising
  22. Global Capability
  23. Quality of Incentive Performance Systems
  24. CEO Leadership Style
  25. Accessibility to Management
  26. Product Defect Rates/Service
  27. Product Durability
  28. Quality of Employee Training
  29. Quality of Guidance
  30. Employee Turnover Rates
  31. Knowledge & Expertise of Investor Relations Contact
  32. Number of Customer Complaints

Looks like “Management Credibility” is being rated very highly by investors. To a large extent, with clearer corporate transparency and good corporate governance, this will definitely help listed companies to maintain at least their share prices and might able to invite aboard prominent investors.

Leave a Reply