Despite the continued uncertainty of the COVID-19 pandemic, the survey shows that the perspectives and confidence of CEOs have shifted. CEOs are more optimistic about growth: For the first time since January/February 2020, prior to the pandemic, more than half (60 percent) of global CEOs are confident about the growth prospects of the global economy over the next 3 years.
Overall, CEO confidence levels have returned to the levels of early 2020, despite the Delta variant slowing down the return to normal. But to deliver this growth, organizations will need to make sure they have the right talent with the right skills to bring their growth plans to life. The research found that 88 percent plan to increase head count over the next 3 years, with close to one-third (32 percent) planning an increase of more than 6 percent.
As CEOs look to drive growth, they also face the significant task of leading companies in a time of great uncertainty, where assumptions and forecasts are subject to constant change. This means very little is certain and no single risk emerged on top. There is a three-way tie for threats to growth: supply chain, cyber security and climate change; very closely followed by disruptive technology, regulatory and operational risks.
Supply chain risk (saw a rise of 10 percentage points from 2020): In the research, 78 percent of CEOs lead businesses that operate a supply chain, with 56 percent of that group saying their supply chain has been under increasing stress over the past 18 months.
Tax risk (saw a rise of 8 percentage points from 2020): Three out of four (75 percent) CEOs believe that the pressure put on public finances by the pandemic response has increased the urgency for multilateral cooperation on the global tax system. At the same time, 77 percent agree that the proposed global minimum tax regime is of significant concern to their organization’s goals on growth. Meanwhile, they’re more worried about regulatory and tax risks than they were prior to the pandemic. The survey also found that 74 percent of CEOs recognize the strong link between the public’s trust in their businesses and how their tax approach aligns with their organizational values. As businesses aim to build back better, a majority (69 percent) of CEOs are feeling increased pressure to report their tax contributions publicly as part of their broader environmental, social and governance commitments.
The convergence of issues ranging from climate change to social tensions has not just created widespread uncertainty — it has called into question the role that institutions play in the world today. In this context, stakeholder expectations of businesses have risen, and the actions of organizations and their leaders are under increasing scrutiny. Today, CEOs aim to deliver the shareholder returns investors expect and help build a better future for society.
Corporate purpose is key to meeting those goals. Now, more than ever, people care about what the companies they buy from stand for. Purpose is connected to a company’s role in society, its impact on the environment, how it sustains long-term value and how it operates within its community. It answers the question: “Why is our company in business — and how will it stay relevant?”
CEOs recognize the importance of purpose. For example, the research found that 87 percent said that purpose is central to building their brand reputation. This reflects the transition of business to multi-stakeholder capitalism, with nearly two-thirds (64 percent) saying purpose is the defining objective of their business and only 13 percent say their corporate objective is to manage shareholder value.
Optimism is high, with 87 percent of CEOs confident in their own company’s growth prospects, and inorganic strategies will be key to achieving this ambition.
As CEOs look to react quickly to how markets have changed during the pandemic — particularly digital-driven changes in consumer preferences — M&A will likely be key to quickly building new capabilities and capitalizing on growth opportunities. Overall, 87 percent of CEOs say they’re looking to make deals in the next 3 years. Among that number, 50 percent characterize their M&A appetite as ‘high’, with CEOs likely to undertake acquisitions that will have a significant impact on their organization.
M&A will likely be particularly important for driving digital innovation and acquiring technology capabilities. The acceleration in digital technologies we’ve seen during the pandemic has meant that markets now operate more quickly. There has been a reset in the velocity of business, in areas such as customer behaviors, and CEOs need to ensure their companies are plugged in to this new dynamic and leading the pack. CEOs are shifting toward a cloud-first mindset, with half (50 percent) saying that they intend to partner with a third-party cloud technology partner in the next 3 years in pursuit of their growth objectives.
Unless otherwise indicated, throughout this report, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International.
