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The business community around the world is exposed to many challenges to growth, including geopolitical uncertainty, political overlap, and rising stakeholder expectations regarding environmental, social, and corporate governance (ESG) practices and generative artificial intelligence (AI). Medium-term global confidence is relatively strong despite current macroeconomic and geopolitical challenges, however, the path to long-term sustainable growth could affect over time at the global level.
CEOs can lead the return to a more equitable and prosperous world, and the key to success will be a sustained focus on long-term strategic planning and commitment, avoiding the risks of reactive, temporary leadership inherent in periods of profound uncertainty.
Economic forecasts
Global confidence in the economy has not changed in recent years, exceeding pre-pandemic confidence levels, and nearly three in four global CEOs feel certain about the economy over the next three years, compared to 71% last year. This optimism reflects clear resilience and a collective interest in returning the world to a path of long-term sustainable growth. Despite this, CEO confidence in their companies’ growth prospects has fallen to its lowest level in three years, with 77% declaring their confidence this year compared to 85% at the beginning. Year 2020.
The shift in how CEOs view risks to business growth is noteworthy, with geopolitics and political uncertainty now at the top of the list, recognizing that these are not just short-term considerations.
In a geopolitically divided world, CEOs often have a de facto policy role, and their approach should elevate policy on the boardroom agenda while creating a geopolitical risk strategy that should include expert insights, planned scenarios, and stress testing. Extremely important. Everyone realized its importance during the pandemic period, from my personal point of view.
The top 10 risks this year were geopolitics and political uncertainty, operational issues, emerging/disrupting technology, supply chains, regulatory concerns, environmental/climate change, interest rates, cybersecurity, reputational risk and talent acquisition.
As CEOs deal with and confront these challenges, they realize that demonstrating personal integrity is the most important key to building trust. Nearly 71% expressed their willingness to reduce part of their investments if it would put their reputation at risk. In addition, 61% expressed their willingness To take a public position on politically or socially controversial issues, despite potential boardroom concerns.
Changing technology
Artificial Intelligence is bringing about change in various fields, and this is evident in daily life, business and society as a whole, and with AI tools such as: Bard and GBT Chat gaining great importance, CEOs around the world are realizing the unlimited potential that generative AI has. Increasingly, they continue to keep pace with developments in terms of investments and technology exploration; This makes global CEOs give generative AI a top investment priority.
According to the KPMG 2023 CEO Survey, 70% of CEOs are investing heavily in generative AI as a competitive advantage for the future, with 52% of them expecting a return on their investment within three to five years.
A recent technology report from KPMG found that 55% of organizations said progress toward automation has been delayed because they are concerned about how AI systems make decisions.
Despite the desire to move forward with their investments, CEOs globally recognize that emerging technology can create risks that must be addressed, with 57% citing ethical challenges as the top concern when deploying generative AI, closely followed by a lack of regulation. Organizational.
Organizations may need policies and practices that they can apply with confidence, especially with increased scrutiny and regulation in the field of artificial intelligence. However, CEOs acknowledge the risks associated with the emerging technology, especially ethical challenges (57%) and the lack of regulation as well, and security concerns have increased. Cyber, with 82% recognizing the potential for new risks to emerge even as AI helps detect cyber attacks. CEOs must lead by adopting responsible AI frameworks and prioritizing protection and governance.
Talents
This year’s challenging global landscape highlights the pressures CEOs feel when making decisions on a variety of critical issues; Which impacts how CEOs plan to support and attract talent over the next three years.
It is worth noting that global CEOs continue to indicate their support for traditional ways of working before the pandemic, with 64% of them expecting that a full return to their offices will only take three years, and this remains consistent with their views in CEO forecasts for 2022. Ma says Nearly 87% of CEOs say they are likely to reward employees who try to come into the office with favorable assignments, raises, or promotions.
This sentiment confirms the continuation of traditional thinking among CEOs that revolves around working in the office, and this comes against the backdrop of the controversy surrounding hybrid working, which has had a positive impact on productivity over the past three years and enjoys strong support from employees, especially among the younger generation of employees. As organizations continue to roll out return-to-office plans, bosses should take a long-term view that includes the employee value proposition and includes employee considerations and needs to ensure talent is nurtured and supported.
While there is broad agreement on the importance of inclusion, diversity and equality (IDE), CEOs express concern about the slow pace of progress, and two-thirds (66%) believe progress in these areas has been too slow; Which confirms the need for change at the senior leadership level (72%).
Environmental practices
Social and corporate governance
ESG practices are increasingly recognized as an integral part of an organization’s strategy; This ensures long-term resilience and growth amid geopolitical and economic challenges. Despite the controversy surrounding the term ESG practices, CEOs recognize that it remains an integral part of business operations and organizations’ strategies and are taking a more results-driven approach.
More than two-thirds (69%) of CEOs globally have fully integrated ESG practices into their businesses as a means of creating value, and while CEOs believe they are a few years away from seeing returns on ESG investments, they recognize its importance For customers and brand reputation. However, 68% admit that their current progress on ESG practices may not stand up to potential scrutiny from stakeholders or shareholders, and balancing progress with business growth remains a challenge, as indicated by more than half of CEOs in the Ensuring Maturity Index. Environmental, social and governance practices.
In conclusion, CEOs play a pivotal role in navigating a complex landscape of challenges, and their decisions have far-reaching implications for the future of business and society.
2023-12-13 03:57:04
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