CEO Insights for What's Ahead | 6.8.22
Chart of the Week: CEO Confidence Plunges Across the Globe?
The Conference Board Measure of CEO Confidence? declined sharply in both the US and Europe in recent readings. In the US, the Measure of CEO Confidence fell to 42 in the second quarter of 2022, while confidence levels in Europe dropped to 37 in the first half of the year. At 34, confidence levels were lowest among CEOs of multinational companies in China in the first half of 2022, where the measure was taken for the first time. (A reading below 50 points reflects more negative than positive responses for each of the surveys.)
Why It Matters The war in Ukraine has not only caused a major security and humanitarian crisis but also resulted in a more troubled outlook for the global economy. Historically high energy prices, repeated supply chain disruptions associated with the war and lockdowns in China, heightened geopolitics risks, and eroding consumer confidence, are all placing downward pressure on growth prospects. As a result, The Conference Board downgraded its global GDP growth forecast to 2.9 percent for 2022 and 2.4 percent for 2023. Growth in 2022 had been expected to expand by 4 percent before the start of the war in Ukraine.?
Across the country, just 12 percent of physicians practice in rural areas—yet these communities are home to 20 percent of the US population. In a recent episode of Sustaining Capitalism, Tom Morris, Associate Administrator for Rural Health Policy at the US Department of Health and Human Services, shed light on the factors contributing to the health care shortage. With a medical training system centralized around hospitals and universities in major cities, few are exposed to working in rural health as part of their education, which impacts their decision when choosing where to practice. Salaries in urban areas are also more competitive. And there is a lack of job opportunities for clinicians’ spouses in rural communities.?
Why It Matters Rural areas face higher mortality rates, lower life expectancy, and more excess deaths from chronic disease and substance abuse—disparities that extend across all racial groups. Beyond attracting more clinicians to these communities, telehealth must play a growing role in closing these gaps. The public and private sectors need to work together to ensure future momentum and lower barriers for new clinicians considering practicing in rural or underserved areas.
With the war in Ukraine and the looming threat of Russia-backed cyber retaliation, companies and governments are intensifying their focus on cybersecurity. But the war is part of a broader picture that should prompt companies to focus on cybersecurity in a sustained (not episodic) manner. These include proposed SEC disclosure rules on cybersecurity, a new federal statute requiring companies to report significant cyber breaches to the US Department of Homeland Security, and cybersecurity being viewed as a key ESG issue.
Why It Matters Cybersecurity requires consistent, high-level attention because it affects a company’s relationship with all of its key stakeholders. Breaches are potentially more damaging than ever, as ransomware attacks escalate and others—including hackers and government regulators—seek to control the narrative.
Trust in corporations has been built up over the course of the pandemic, but it is in danger of disappearing if there is any sense of profiteering or recovering revenues lost in 2020 and 2021, as a result of rising prices. Several companies have already felt the backlash as they announce earnings that are flowing off the back of rising prices.
Why It Matters Managing the communications flow will be critical, from your investor relations calls and your customer service and sales teams to your internal communications. Finding ways to promote the value of your goods, your services, and your brands will be imperative. The reputation of your business and your brand are powerful economic engines that can drive long-term success. They take a long time to build but can collapse in a moment. Communicating the story to your customers is to be handled carefully, but honesty and transparency are key to preserving trust.
The number of employees identified as being burned out nearly doubled, increasing from 42 percent in September 2020 to 77 percent in March 2022. That’s according to a recent survey of HR leaders. Indeed, employee well-being overall has declined since the outbreak of the pandemic: the number of employees seeking support for mental health and those identifying as burned-out has increased. The total number of hours worked increased as well, while levels of employee engagement/morale and the number of vacation days used both decreased.
Why It Matters “Since the outbreak of the pandemic, employee well-being has declined and burnout is on the rise,” said Rebecca Ray, PhD, Executive Vice President, Human Capital. “To retain workers, HR leaders will need a strong focus on improving the employee experience. That includes both allowing and encouraging employees to integrate their work and personal lives in a way that works best for them.”
QUOTABLE
"There is no more ‘daylight’ between strategy and ESG-related topics. They're one and the same. And if you're not making those interdependent, you're actually going to miss a long-term, strategic opportunity; you’ll be at a competitive disadvantage."?
—BOB MORITZ, Global Chairman of PwC International and a Trustee of The Conference Board. Bob joined CEO Steve Odland in a CEO Perspectives?podcast on sustainability.
The Conference Board: Our Role in Assisting Members in Addressing Controversial Social and Political Issues?
Companies are increasingly grappling with whether to take stands on social and political issues. As a 501(c)(3) nonprofit, nonpartisan organization, The Conference Board does not take a position on specific political issues or governmental actions. Indeed, our certificate of incorporation provides that we “refrain from political activity.” But as the world’s leading Member-driven think tank serving the business community for over 100 years, we are here to serve our Members—and the broader public—in helping organizations navigate these challenging times. ?
We provide trusted insights on the expectations of stakeholders—including consumers, employees, and investors—on the appropriate role of companies in addressing social and political issues. We offer unique research on how CEOs and other C-suite executives around the globe are thinking about these topics. We also provide frameworks for companies to decide whether, when, and how to take stands on social and political matters. To learn more about the resources available to you and your colleagues as you think through the right course of action for your organization, we encourage you to visit our webpage on building a more civil and just society. ?
Just as The Conference Board is here to serve our Members and the public, we are committed to supporting our employees. We recognize that many of these issues are emotionally charged—and can have direct consequences for our employees. We are devoted to providing a truly inclusive workplace for people of all backgrounds and views. We are also committed to providing a supportive environment, offering resources to assist employees as they, like our Members, are impacted by these issues. And as always, we support the right and ability of our employees, in their personal capacity, to express their own views through the legislative and political processes.?
ABOUT THE CONFERENCE BOARD
Who We Are
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Our agenda is simple: to help leaders navigate the biggest issues facing business and better serve society.?Learn more ?