MEDIA RELEASE PR41073
2010 Q2 Korn/Ferry Confidence in Leadership Index Reverses Course, Shows Declining Confidence in
Corporate Leaders
LOS ANGELES, Sept. 7 /PRNewswire-AsiaNet/ --
Research Shows Highest Concerns are for CEO and Board of Directors'
Leadership Ability
The Korn/Ferry Institute's Confidence in Leadership Index reveals a
significant decline in the trust and confidence executives have for corporate
leadership, as well as their leadership direction. Gauging perceptions of
global leaders over the last five quarters, the survey shows that the
recovery of confidence stalled during Q2, from a surge to all-time highs in
Q1. In some cases, confidence in leaders reversed course as numbers dipped to
2009 levels mirroring several global economic indicators.
The relationship between leadership confidence and economic measures is
substantiated by leading indicators such as the Dow Jones Industrial Average,
Shanghai Stock Exchange, NIKKEI, Sao Paulo Stock Exchange, and the Global Dow
all falling by from 10-23 percent in Q2. Furthermore, the Confidence in
Leadership Index uncovered that the most significant decline in credibility
was at the very top of the house. Corporate boards lost six points in the
credibility of leadership score, and CEOs declined by five points during Q2.
"From the C-suite to the Board, the top of the house is typically the
first to be credited with success in economic upswings, and scrutinized
during fragile environments," said Ana Dutra, CEO, Korn/Ferry Leadership and
Talent Consulting. "Our Index findings seem to indicate that confidence in
leadership closely follows economic upward and downward trajectories. This
suggests that, during times of economic instability, top leadership must take
even more proactive steps to ensure stakeholders have confidence in their
capabilities as leaders. Do they have the rights skills, credentials,
integrity, and ability to drive the organization through the periods of
volatility?"
The Confidence in Leadership Index measures four key factors of
leadership:
- Characteristics of Leadership
- Credibility of Leadership
- Trust in Leadership
- Direction of Leadership
The Q2 data was collected by Korn/Ferry between May 24-June 30, 2010.
Confidence in Leadership Major Findings
- Overall, credibility of leadership globally is down four points from Q1
and tied for an all-time low at 74 points. The top of the house
declined the most. Credibility of Boards fell by six points (67).
Credibility of CEOs fell by five points (73).
- Trust in leadership fell to an all-time low on the Index at 77, with
every single trust category losing ground in the quarter.
- European leadership trends pointed downward, possibly the result of
Europe's credit market and sovereign debt crisis. Following marked
improvement in most Confidence in Leadership Index categories in Q1,
European leadership set an all-time low in Direction of leadership at
10 (on a -100 getting worse to +100 getting better scale) and saw
significant drops in credibility and trust.
- Asia Pacific was the only region to improve in the trust-in-leadership
category, setting an all-time high at 80. While this is inconsistent
with Asian financial market performance during Q2, it may be due to
Asia's general leadership in the global economic recovery.
- North America generally reverted back to Q2 2009 levels, dropping nine
points on the direction of leadership scale, losing four in credibility
of leadership and down three in trust in Leadership after reaching
all-time highs in each category in Q1. Both the credibility and trust
in leadership scores were all-time lows at 74 and 78 points
respectively. The highly-publicized and watched Gulf region oil
disaster was unresolved when the Index was measured, and may have had
some influence on these results.
- Central/South America results were mixed. While the region tallied its
fifth consecutive improvement in the direction of Leadership, it set
all-time lows for both credibility and trust in leadership with 78 and
81 points respectively.
Snapshot of Confidence in Leadership Survey Results
Credibility of Leadership Scores:
- Overall credibility of leadership globally is down four points from Q1,
and tied with Q2 2009 for an all-time low in the Index. The four-point
swing was the largest quarter-over-quarter change ever for the
credibility index.
Category Q1 Index Q2 Index Change
Own Leadership Ability 88 88 0
Direct Reports' Leadership
Ability 75 75 0
Boss's Leadership Ability 75 71 -4
Company Management's
Leadership Ability 75 71 -4
CEO's Leadership Ability 78 73 -5
Board of Director's
Leadership Ability 73 67 -6
Global Average for
Credibility of Leadership 78 74 -4
Region Q1 Index Q2 Index Change
North America 78 74 -4
Asia Pacific 77 76 -1
Central/South America 82 78 -4
Europe 76 71 -5
Trust in Leadership Scores:
- Trust in Leadership fell three points to an all-time low of 77 on the
index, with every single category losing ground in the quarter. The
previous low was 79 in Q3 2009 (the first time the Trust in Leadership
questions were fielded).
Category Q1 Index Q2 Index Change
Our business consistently adheres to
the highest standards of business
conduct 83 81 -2
The company operates with the highest
set of ethical standards 84 81 -3
All employees understand and follow
our code of conduct 81 78 -3
Our leaders are models of ethical
business conduct 82 78 -4
Leaders are quick to admit mistakes
and accept responsibility 70 68 -2
Category Q1 Index Q2 Index Change
North America 81 78 -3
Asia Pacific 78 80 +2
Central/South America 84 81 -3
Europe 77 72 -5
Global Averagefor Trust
in Leadership 80 77 -3
Direction of Leadership Scores:
- The direction of leadership - measured on a -100 (getting worse) to
+100 (getting better) scale - declined by seven points (from 24 to 17),
yet remained in positive territory globally. The Q2 index hovered just
above the all-time low of 16 set in Q2 and Q3 2009.
Region Q1 Index Q2 Index Change
North America 14 5 -9
Asia Pacific 36 32 -4
Central/South America 49 50 +1
Europe 22 10 -12
Global Average for
Direction of Leadership 24 17 -7
The margin of error within each wave is +/- 4.4%. For complete survey
About The Korn/Ferry Institute
The Korn/Ferry Institute was founded to serve as a premier global voice
on a range of talent management and leadership issues. The Institute
commissions, originates and publishes groundbreaking research utilizing
Korn/Ferry's unparalleled expertise in executive recruitment and talent
development combined with its preeminent behavioral research library. The
Institute is dedicated to improving the state of global human capital for
businesses of all sizes around the world.
About Korn/Ferry International
Korn/Ferry International (NYSE: KFY), with a presence throughout the
Americas, Asia Pacific, Europe, the Middle East and Africa, is a premier
global provider of talent management solutions. Based in Los Angeles, the
firm delivers an array of solutions that help clients to attract, develop,
on the Korn/Ferry International family of companies, and
research.
SOURCE: Korn/Ferry International
CONTACT: Mary Beth Barron
+1-312-526-0582
cell, +1-312-543-0150
marybeth.barron@kornferry.com
or Kevin Oates
+1-310-584-8331
cell, +1-310-869-7519
kevin.oates@ketchum.com
both of Korn/Ferry International
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