Nowadays, with the prevalent of accounting fraud and the increasing rising trend of encouraging good corporate governance, investors do not only take profitability as the sole weight in assessing the company.
According to survey done by Ernst & Young, the following are the most important non-financial factors ranked by investors:
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EXAMPLES OF NON FINANCIAL FACTORS VALUED BY INVESTORS/PUBLIC
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- Execution of Corporate Strategy
- Management Credibility
- Quality of Corporate Strategy
- Innovativeness
- Ability to attract and retain talented people
- Market Share
- Management Expertise
- Alignment of Compensation with Shareholder interests
- Research Leadership.
- Quality of Major Business Processes
- Customer Satisfaction Level
- Performance-based Compensation Policies
- Brand Image
- New Product Development Efficiency
- Customer-perceived Quality
- Quality of Organizational Vision
- New Product Development Cycle Time
- Quality of Workforce
- Repeat Sales Level
- Percentage of Revenue Derived from New Products
- Strength of Marketing & Advertising
- Global Capability
- Quality of Incentive Performance Systems
- CEO Leadership Style
- Accessibility to Management
- Product Defect Rates/Service
- Product Durability
- Quality of Employee Training
- Quality of Guidance
- Employee Turnover Rates
- Knowledge & Expertise of Investor Relations Contact
- Number of Customer Complaints
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Salient Point to note:
· From the above, we see that “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.
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