Our 2022 CEO Outlook was conducted with 1,325 CEOs across 11 key markets in July and August 2022 and provides unique insights into the mindset, strategies and planning tactics of CEOs globally. Our report focuses on five key areas: Growth Prospects, ESG, Digital Transformation, Corporate Purpose, and Inclusion, Diversity & Equity
Key Australian developments
- Business leaders in Australia and around the world foresee a ‘short and mild’ global recession in the next 6-12 months. However, CEOs are confident of a return to growth over the next three years.
- Pandemic fatigue and continued uncertainty raise the highest level of concern for Australian CEOs today.
- More than half of Australian CEOs struggle to articulate a compelling ESG story to stakeholders. But Australian CEOs are still ahead of the global pack on their use of company purpose, thinking on inclusion and diversity; and the benefits of gender equity.
- Australian CEOs tend to have a more aggressive digital investment agenda, designed to get first-mover advantage.
The main areas of focus for Australian CEOs in the next three years are:
There’s a general sentiment from Australian and global CEOs that there will be a relatively short and mild recession in the next 12 months.
75% of Australian CEOs feel the need to respond to rising expectations of ESG transparency and reporting. Yet, over half say they are struggling to do so in a compelling way.
A large majority of CEOs will be investing heavily in digital capabilities in the near future. The same percentage first want to address burnout from the last two years of accelerated digital transformation.
Company purpose is ranked as important in shaping and driving action in several key areas, including employee engagement, financial performance, customer relationships, brand, capital allocation and partnerships.
Inclusion, Diversity & Equity
76% of Australian CEOs were firmer on the issues of Inclusion Diversity & Equity (IDE) and gender equity compared with their international counterparts (68%).
The fact that most see their digital and ESG strategic investments as inextricably linked shows how ESG is now central to company operations. But it is also clear from the findings that digital transformations are people issues as much as technology issues, and companies must be careful to take everyone with them before continuing on the journey.
Economic issues are a concern
Most CEOs across Australia and globally state there will be a recession within the next 6-12 months, but it will be relatively short and mild. Leaders believe that the anticipated downturn could make it more difficult to rebound from pandemic-related disruptions and could hinder anticipated growth. Earnings could be impacted by 10% or more.
Looking further ahead, the large majority are confident in growth prospects for their company, although most projections were quite modest, with growth of up to 5%.
Earnings could be impacted by 10 % or more.
Up to 5 % business growth is projected for a large majority of businesses, despite the majority of CEOs forecasting a recession.
Demand continues to rise for ESG reporting
75% of Australian CEOs are seeing demand for increased reporting and transparency on ESG issues from investors, regulators employees and customers.
While this scrutiny is set to increase, 60% of Australian CEOs admit they struggle to articulate a compelling ESG story to those stakeholders, compared with 33% of CEOs on a global scale.
Australian CEOs also say that in three years’ time, their biggest barrier to driving an ESG strategy will be a lack of budget for ESG transformation.
of Australian CEOs believe a huge threat to growth will be climate change, compared with 74% of global CEOs.
of Australian CEOs say they would invest up to 25% of revenue in programs to become more sustainable, compared to just 18% of global leaders.
Aggressive digital investment is on the agenda
88% of Australian CEOs have an aggressive digital investment agenda, designed for first-mover advantage.
The same percentage also warned they must address burnout from accelerated digital transformation over last two years before continuing their transformation journeys.
Managing cultural impact and making sure staff adapt to and sustain the new ways of working are seen as the key to digital transformation.
of Australian CEOs don’t have enough people talent to handle the strategic and operational roll-out of new digital and business transformation.
of Australian CEOs believe building a cyber security culture is just as important as building technological controls.
Important for shaping and driving action
Australian CEOs ranked company purpose as important in shaping and driving action across several key areas:
— 88% feel company purpose strengthens employee engagement
— 80% believe it helps drive financial performance
— 88% say it helps build better, more meaningful customer relationships
— 78% believe it helps build their brand, and
— 82% believe that having a corporate purpose helps them shape capital allocation, alliances and partnerships and their M&A strategy.
— Australian CEOs are more likely to place more importance on a corporate purpose compare to their global counterparts.
believe that having a corporate purpose helps them shape capital allocation, alliances and partnerships and their M&A strategy.
Inclusion, Diversity & Equity
Australian CEOs are investing in improvement
76% of Australian CEOs believe Inclusion, Diversity & Equity has moved too slowly in the business world, compared to 68% of global CEOs.
A higher proportion also argue that more gender equity in their C-suite will help achieve the company’s growth ambitions.
of Australian CEOs believe more gender equity in their C-Suite will help achieve growth ambitions.
of Australian CEOs say they’d spend 11-25% of their revenue investing in programs to help improve Inclusion, Diversity & Equity.
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The key issues and priorities on the minds of Australian CEOs, as revealed in KPMG’s 2022 Global CEO Outlook survey.
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