CEO Insights for What's Ahead | 6.22.22
That’s the total proportion of CEOs now expecting a recession in their main region of operations this year or next. According to a new survey from The Conference Board, more than three in four global CEOs either believe their region is already in a recession (15 percent)—or expect it will enter a recession by mid-2022 (12 percent), late-2022 (31 percent), or in 2023 (18 percent).
Why It Matters Historically high energy prices, renewed supply chain disruptions, heightened geopolitical risks, and eroding consumer confidence are all putting downward pressure on global growth. That’s on top of lockdowns in China and the cascading ripple effects of the war in Ukraine. These disruptions, along with restrictive monetary and fiscal policy decisions, are fueling fears of recessions within the next 12 to 18 months.
By 2031, the global cost of ransomware attacks is estimated to reach a staggering $265 billion annually (up from $.33 billion in 2015), as detailed in a new infographic from the Committee for Economic Development, the public policy center of The Conference Board (CED). The new visualization showcases the increasing threat that cyberattacks pose to the global economy and provides recommendations for government and private sector collaboration to bolster US cyber resiliency.
Why It Matters Before the Russian war on Ukraine, few CEOs saw cybersecurity as a major issue facing their companies. Now, based on the latest survey data released from The Conference Board C-Suite Outlook Midyear, 90 percent of CEOs share concern about Russian retaliation through cyberattacks, and 44 percent of C-suite executives are highly concerned (compared to 19 percent sharing major concern in January 2022). Based on this data, it’s clear that leaders in the public and private sector must collaborate and make cybersecurity a sustained, and not just episodic, priority. It is only through public-private leadership and collaboration that we will be able to tackle this very serious challenge.
With a few exceptions, we are unlikely to see a significant near-term increase in S&P 500 disclosures about human capital management (HCM) until the SEC proposes new disclosure rules and/or until corporate boards make HCM a core part of their business strategy and decide both to measure and report on it. We are seeing an increase in quantitative disclosure from 2020-2021 among the S&P 500 in a few key areas: minorities in the US workforce (from 42 percent to 56 percent), employee turnover (from 21 percent to 30 percent), and gender pay gap (from 13 percent to 27 percent). But in the main S&P 500, disclosures focus on key workforce policies relating to equal opportunity, compliance, whistleblowing, and employee health and safety, as well as some basic quantitative information on diversity, including women on the board and in the workforce.
Why It Matters While there are obvious benefits to telling the company’s HCM story effectively, there are significant barriers to doing so. These include the competitively and otherwise sensitive nature of some HCM information, the lack of disclosures among peers, and the absence of consistency in the information requested by investors and ESG reporting frameworks. And even when a company is committed to increasing its HCM disclosure, it can take years of effort.
The latest research from The Conference Board on multicultural US consumers finds that a vast majority see an urgency to change their energy consumption to avert an energy crisis. Yet about half of Americans feel underinformed as to how to save energy. Moreover, an energy shortage and political considerations surpass environmental worries stemming from energy production. Consistent with prior research on sustainability topics, it is non-White and higher-income consumers who are most supportive of a greater focus on energy consumption and sourcing policies that are sustainability-friendly.
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Why It Matters It may be easier for people to understand the threat of an energy shortage—which is also associated with price increases—and of a dependency on foreign energy suppliers, than of the environmental impact of energy production. This might also be due to a lack of information. Overall, there seems to be a great need for energy education, including how to save energy. Such education doesn’t have to be the task of just the traditional “energy educators” such as utility companies and environmental organizations. Instead, any type of organization can educate customers and employees and demonstrate prudent energy use through their own operations.
Russia’s brutal invasion of Ukraine has led the US, NATO, and allies and partners worldwide to implement a historic series of escalating economic sanctions—and close to 1,000 businesses have ceased operations or withdrawn entirely from the Russian market. In response, Moscow is aggressively pursuing new pathways to circumvent these restrictions. While the short-term aim is keeping Russia afloat economically, Moscow’s ultimate goal may be to resurrect a Cold War-style bifurcation that offers an alternative world trade order not dependent on the financial primacy of the US and the dollar.
Why It Matters Reducing the use of the US dollar has been an objective of both Russia and China for over a decade, with the dual aims of asserting global economic leadership and shielding their economies from US sanctions amid rising geopolitical tensions. Since its initial annexation of Crimea in 2014, Russia has already dramatically reduced its share of trade conducted in dollars. Is the USD being eclipsed as a global currency? CEOs are skeptical but watching wearily:?While just 16 percent say they are “highly concerned,” over 40 percent are now “somewhat concerned” about a decline in the dollar’s preeminence, according to a new survey from The Conference Board.
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“Every recession is different. And certainly, this next one that we're forecasting for the US, and maybe even for the global economy, is coming from a position of strength.”
—DANA PETERSON, Chief Economist, in a?CEO Perspectives?podcast on the latest survey of global business executives by The Conference Board.
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