CEO focus on shareholders
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THE leaders of strongly growing Western Australian companies believe a focus on delivering value to shareholders is the key to their success.
This was one of the findings of a recent survey of WA chief executives by accounting firm Deloitte.
Respondents to the survey, who were mainly from the mining and resources sector, also stated that revenue, profitability and market share were the key indicators of growth for their business.
Chief executives from companies that had achieved exceptionally strong growth in the past two years were invited to participate in the survey.
This was defined as WA companies with a market capitalisation of more than $50 million and 40 per cent-plus growth in market capitalisation.
The survey found that new investment opportunities and the ability to attract and retain quality people, including quality management, were key growth drivers into the future.
Exploration success and commodity prices were other growth drivers, especially for companies involved in the resources sector.
About half of the respondents to the chief executive survey said that, given the capital requirements associated with developing a new project, they saw mergers and strategic alliances playing a significant role in their future growth.
The main barrier to achieving future growth was the shortage of experienced staff. This echoes widespread concern about shortages of skilled labour, especially in traditional trades and in areas like engineering and accounting.
Environmental restrictions and government policy were also seen as barriers to growth.
Financing issues, such as the ability to raise capital and cash flow management, did not rate as significant factors.
Looking to 2006, the main area of investment is expected to be in each company’s operations, reflecting a focus on their core activities.
Companies also plan significant investment in staff-related matters, such as recruitment and hiring of new staff, benefits and salaries to retain staff, as well as training and development to get better results.