CEO Insights for What's Ahead | 3.1.22
In February, the Expectations Index component of The Conference Board #ConsumerConfidence Index?—based on consumers’ short-term outlook for income, business, and labor market conditions—fell further to?69.7?(1985=100) from a downwardly revised 76.0 in January.
Notably, the #ExpectationsIndex has now fallen below 80—the level which often signals a recession within the next year—for 11 of the past 12 months.
The big picture:?Overall, the Consumer Confidence Index? fell 3.1 points in February to 102.9 (1985=100)—its second consecutive decline. A slight uptick in the Present Situation Index—based on consumers’ assessment of current business and labor market conditions—was too small to offset the more substantial decline in expectations.?
Jobs remain bright spot—for now:?The labor market was the key factor behind positive views for the present situation. In fact, the proportion of consumers saying jobs are ‘plentiful’ climbed to 52.0 percent—back to levels seen in the spring of last year.?
Storm clouds ahead:?The outlook is considerably more pessimistic when looking ahead. Expectations for where jobs, incomes, and business conditions are headed over the next six months fell sharply in February, and intentions to purchase homes, autos, vacations, and major appliances pulled back.
Last week marked the one-year anniversary of Russia’s invasion of Ukraine. In the latest episode of?Sustaining Capitalism, Dr. Lori Esposito Murray, President of the Committee for Economic Development , the public policy center of The Conference Board (CED), spoke with John Gardner, Vice President of Public Policy at CED. The conversation covered where the war stands, how it might unfold, and more.?
The state of war, one year later:?While #Ukraine has reclaimed a third of what Russia had taken control over, the two countries currently face a stalemate. In response, Russia is planning on launching a major offensive after conscripting 150,000 to 250,000 troops and putting them at the border. And, the US and NATO allies are sending more advanced weaponry to Ukraine. The next few months will be critical in determining the future course of the military conflict.
US leadership remains critical, but a resolution demands a broader effort:?US leadership has been key in recognizing the war’s global impact on the rules-based international order, the global economy, and various nations—especially those suffering food shortages and steep energy costs. A negotiated solution isn’t currently foreseeable. However, if there is going to be a cessation of hostilities or a negotiated off ramp, it will need to include involvement from the two major economic powers that are Russia’s trusted allies, China and India.
There’s significant room for improvement in the interview process, from increasing efficiency to making it more equitable. That’s according to a survey from The Conference Board Human Capital Center.
Dial back the number of interviews:?The survey found a disconnect between the number of interviews both candidates and hiring managers think are necessary versus the number that occur. Candidates and hiring managers believe only?two rounds?of interviews are necessary, but nearly a quarter of candidates had?four or more?rounds.
Standardize the format:?The format and focus of interviews also vary widely. Only 33 percent of hiring managers report that their interviews were structured, and only 17 percent say structured interviews are company policy. And while interview questions were aligned with competency and qualifications for 62 percent, only 18 percent use a competency grid to standardize questions.
The path forward:?Standardizing and improving the hiring process helps to make it more equitable. By refining their interviewing processes and evaluating candidates along the same parameters, hiring teams can increase their ability to determine which candidates are the best fit, leading to better quality hires and increased productivity.
领英推è
Attracting and retaining talent is the leading internally focused initiative that C-suites globally will focus on this year—ahead of profit and revenue growth, according to our?#CSuiteOutlook 2023. No wonder that for 45 percent of C-suite executives, internal communications is the leading communications-related investment in the next 24 months, ahead of external PR (40 percent) and crisis management (36 percent).?
Employees as number-one focus:?The communications team has a vital role in building culture, engaging employees, and retaining them. This is even more important given the difficult job market in many professions, enhanced employee expectations, and hybrid work. Companies that are cutting jobs have to act and communicate in a sensitive way. Employee communications and employer branding are also important with an eye to when the economy picks up pace again to build a pipeline of potential talent.?
Multi-tasking:?Apart from the employee focus, communications teams need to manage relationships and reputation with investors and, increasingly, the government, considering the volatile times and global challenges—from climate to geopolitical challenges with supply and inflation implications to cybercrime. This also requires monitoring for potential emerging issues and preparing for crises.
Nearly half of US companies polled say their boards are doing just an “ok†job of assessing #ESG performance. 60 percent say they evaluate stakeholder relationships on a piecemeal basis. It’s time to take a fresh look at how boards evaluate the?company’s, senior management’s,?and the?board’s?own performance.?
The path forward:
- The board should review the?company’s?ESG progress as part of its annual review of the company’s strategic, operating, and financial performance. Boards should also look at the state of the company’s relationships with key stakeholders.
- The board’s review of?senior management’s?performance should go beyond one or two ESG metrics embedded in executive compensation. Instead, boards should assess how management is addressing key ESG and stakeholder priorities through the company’s products and services, operations, workforce, communications, and public affairs.
- The board’s annual?self-assessment?of its own performance should ask whether it has the right composition, capabilities, leadership, and committee structure to serve as a strategic partner with management to address the company’s ESG priorities. It should consider whether the board is appropriately incorporating ESG issues and stakeholder impact into decisions.
- There should be alignment?among all three types of evaluations. If increasing the diversity of the workforce, or transitioning to renewable energy, are company priorities, they should appear in annual assessments of the company’s, management’s, and the board’s performance.
Produced with Morrow Sodali and Weil, Gotshal & Manges.
QUOTABLE
“As the world has become more complicated, as the demands from institutional investors and other shareholders have become more complicated, there's a multi-stakeholder view on how the board needs to operate. And that certainly increases the pressure on board members to deliver in new and different ways.â€
?—? Constantine G. Alexandrakis , CEO of Russell Reynolds Associates . He joined the?CEO Perspectives?podcast to discuss the role of corporate boards.
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