Business and politics come together in this exclusive survey of Hawaii’s Top 250 executives

May, 2002

If there’s been a constant in government-business relations in Hawaii over the past two decades, it has been the refrain that our elected and appointed political leadership just doesn’t understand the concerns of the business community.

This refrain is usually raised every time the state Legislature goes into session. And during an election year, particularly a big one such as this year’s cycle, the refrain can become down-right deafening.

Now, in all fairness to our political leadership, the problem doesn’t just reside at the State Capitol or in our county buildings. Hawaii’s business community has had a difficult time getting a clear and consistent message out to the politicians about what issues matter the most.

This year, which may be the state’s most critical election cycle since 1986, Hawaii Business has decided to help focus the debate about what matters to our state’s business community. We have commissioned a series of polls that will help gauge state’s largest companies, members of the Hawaii Business Top 250.

There will be some who will criticize the poll for not using executives at smaller companies, firms with annual gross revenues of less than $23 million. And they may have a point. But we believe the Top 250 companies play a key role in determining the health of Hawaii’s business climate. After all, these are companies that in 2000 had combined gross annual sales of $33.94 billion, and had nearly 160,000 employees on their rolls. That’s a lot of clout by anyone’s standard.

In commissioning the Hawaii Business Power Poll, we have enlisted the help of Ward Research, the respected Honolulu polling company. Ward Research conducted the first Hawaii March 6 to 14, via telephone interviews or faxed questionnaires. Of the 250 possible top executives at the Top 250 companies, Ward Research polled 150 who serve as chairman, chief executive officer or president, or in similar positions in their company. The poll’s results have a margin of error of plus or minus 5.1 percent.

What’s at stake? Perry Sorenson, chief operating officer of Outrigger Enterprises Inc. puts it this way: “Everybody has an opinion about what could work. The important thing is that there is an awareness on the part of business and government.”

We hope that the Hawaii Business Power Poll – and there will be others this year before the General Election in November – is an important step in that direction.

Ward Research asked respondents to identify the two most pressing issues facing Hawaii businesses today. Lack of growth was the most popular response (58 percent). Government regulation (42 percent) and cost of benefits (32 percent) were the second and third most common answers.

“I’m looking for the government to address the most immediate economic problem by putting people back to work,”says one executive. “We’ve got to get the unemployment rate down and then go look for new industries.” Taxes also place a heavy burden on local businesses, said 28 percent of the executives. Fifteen percent of respondents felt there was not enough support for local companies, while 12 percent said that Hawaii did not have sufficient work force education.

Approximately 83 percent of the Top 250 executives polled responded favorably to capping corporate donations, while 56 per-cent “strongly supported” the movement. Meanwhile, about 27 percent “somewhat supported” capping donations, and 13 percent said they were “somewhat opposed.” Strong opposition came from 3 percent of those polled; and 1 percent said they had no opinion.

Does Hawaii’s political system help or hinder economic growth? Approximately 40 percent of the 150 executives polled felt that government bureaucracy got in the way of business development. Roughly 27 percent said that the size of government was too large and that it also hindered economic improvement.

When Ward Research asked interviewees to name two things they thought would improve Hawaii’s business climate: 21 percent felt there should be more tax incentives and tourism promotions; 19 percent wanted reduced taxes; 18 percent felt there were too many government regulations; and 13 percent said the state ought to reduce its spending.

About 47 percent of those polled said the state government should not regulate prices. And, 27 percent said the government should determine the cost of health plans; retail gas (23 percent); health care (21 per-cent); and interisland airline fees (17 percent).

“I think any service that is provided by only one entity and commercial interest, those are the ones that should be reviewed by the state,” says one respondent. “Otherwise, I think the market competition should set the price.”

While the Hawaii Business Power Poll is focused primar- ily on issues, it did ask whom executives supported for the top executive position in the state, governor. The most popular gubernatorial candidate among top executives, according to the Hawaii Business Power Poll, was Linda Lingle. Exactly 50 percent of the 150 respondents said they favored the former Republican Party chairwoman, based on her pro-business platform and pledge to economic development. In the 1998 election, Lingle lost by 5,000 votes to Gov. Ben Cayetano. Had she won, she would have been the first Republican governor in Hawaii in four decades.

Honolulu Mayor Jeremy Harris, a Democrat, was the second most popular choice for governor, according to the poll. About 19 percent felt that Harris – mayor for eight years — strongly supported local businesses. Democratic candidate Ed Case garnered 13 percent of votes, while 6 percent said they supported D.G. “Andy” Anderson, a Republican-turned-Democrat and well-known business executive. Anderson is a former chief of the state Republican Party and state lawmaker. In the 1982 and 1986 gubernatorial elections, he ran and lost twice. Twelve percent did not support any candidate or declined to comment.

The number of Lingle and Harris supporters (50 percent and 19 percent, respectively) may have been skewed, due to when the Hawaii Business Power Poll was in the field. When Ward Research conducted the survey from March 6 through 14, there were prominent news reports that Harris was under investigation for questionable contributions toward his 1998 mayoral re-election campaign. Individuals and companies, according to law, cannot give more than $4,000 each to mayoral campaigns. The State Campaign Spending Commission then slapped fines on nine companies that donated excessive funds toward his 1998 campaign.

On March 12, Harris temporarily suspended campaign activities and donations, due to a state law that prohibits an existing mayor from simultaneously running for governor. Harris had until July to say if he would resume his campaign.

Visitors are lured to Hawaii, based on an age-old formula of sun, sea and natural beauty, one that the tourism industry has perfected over the years. Marketing the Islands as a place to do business, however, involves a hit- or-miss strategy. Says one respondent: “We’ve improved technology for world- wide communication, making Hawaii more accessible.” Technology, coupled with Hawaii’s proximity to Asian markets, is a small part of that strategy. Ward Research asked executives this question: “If you were selling Hawaii to an out-of-state colleague as a place to do business, which would you stress?” Roughly 77 percent of respondents said that the quality of life was Hawaii’s No. 1 attraction; 63 percent said cultural diversity. Other respondents said Hawaii ought to tout its loyal work force (42 percent), convenient time zone (29 percent) and small market (18 percent).

Despite these strengths, some exec- utives say the economic environment is hostile toward out-of-state businesses. One executive says: “Give tax incentives to any new business. Hawaii is the hardest place to do business, because of government control.”

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