Charting a course through complexity

While CEOs maintain confidence in the future of the global economy, their views on what constitutes a risk to their business have shifted significantly. The persistent flux in global politics, trade dynamics and international relations has required a new level of resilience from CEOs. They are reassessing their strategic priorities, focusing on the rise of generative AI, talent management and high stakeholder expectations in addressing environmental, social and governance (ESG) issues. 


Amidst uncertainty, business leaders remain confident, with many opportunities arising in the face of these obstacles. While geopolitical upheaval and politization are stronger than ever, they focus on long-term strategies concerning increased expectations from stakeholders and society in ESG and generative AI.

CEOs are aware that they need to spend money in the right places and have the right skills to fully capitalize new opportunities for successful, sustainable businesses. Similarly, the current and future work environment is being challenged, and one-size-fits-all approach could be detrimental.

Change is inevitable, but successful change isn’t. And successful change is not just about operational model, processes and strategies, it’s about people – they want to understand “why” they are doing things and how their work has an impact on society. People have different expectations. They want to experiment and see the value in the work that they do. So, this is why us leaders need to prepare our People for the future.

With these thoughts, I wish you a happy reading on the full results of this year’s CEO Outlook 2023.


David Capocci
Managing Partner
KPMG Luxembourg

David Capocci

A happy man standing outside the office building

Confidence in the global economy remains broadly unchanged year over year, surpassing pre-pandemic levels of confidence. Almost three in four global CEOs (73 percent) are confident about the economy over the next three years, compared to 71 percent last year. It reflects a clear resilience and a collective focus to get the world back on a sustainable, long-term growth trajectory. However, CEOs’ confidence in their own company’s growth prospects are at a three-year low; at the start of 2020, 85 percent of CEOs were confident in their company’s growth prospects, compared to 77 percent this year.

CEO confidence in growth prospects for the global economy over the next three years

Source: KPMG 2023 CEO Outlook

This is accompanied by a significant shift in what CEOs view as risks to growth for their business. CEOs now rank geopolitics and political uncertainty as the greatest risk to the growth of their business — be it navigating a company’s presence in a conflict zone or attempting to navigate disrupted supply chains and manage price fluctuations. This shift indicates CEOs have come to grips with the fact that geopolitical risk is not only a short-term consideration. In a geopolitically fragmented world, CEOs often become de facto political players. Their approach should elevate politics on the boardroom agenda while also creating a strategy around geopolitical risk that includes specialized insights, scenario planning and stress testing. 

Risks to growth over the next three years


  1. Geopolitics and political uncertainty
  2. Operational issues
  3. Emerging/disruptive technology
  4. Supply chain
  5. Regulatory concerns
  6. Environmental/climate change
  7. Interest rates
  8. Cyber security
  9. Reputational risk
  10. Talent


  1. Geopolitics and political uncertainty
  2. Regulatory concerns
  3. Operational issues
  4. Emerging/disruptive technology
  5. Talent
  6. Supply chain*
  7. Environmental/climate change*
  8. Interest rates*
  9. Cyber security*
  10. Reputational risk*

*these risks were identified an equal level by Luxembourg CEOs, therefore they're listed in no particular order

Source: KPMG 2023 CEO Outlook

CEOs face shorter-term barriers to delivering growth over the next 12 months. For example, more than three in four (77 percent) say that rising interest rates and tightening monetary policies could prolong any potential or current recessions, while over the next three years, 77 percent believe cost-of-living pressures will negatively impact their organization’s prosperity.

As CEOs navigate and respond to these challenges, they recognize that demonstrating personal integrity is key to building trust, with a majority (71 percent) saying they are prepared to divest a profitable part of their business if it was damaging their reputation. As geopolitics rise on boardroom agendas, 61 percent of CEOs say they would take a public stance on a politically or socially contentious issue, despite board concerns. 

Two people working on the laptop 01

Artificial intelligence (AI) is transforming nearly every field of human endeavor and is embedded in more and more aspects of everyday life, businesses and society. As tools like Bard and ChatGPT have gained prominence, global CEOs increasingly recognize generative AI’s seemingly limitless potential and are keeping their foot on the gas in terms of their investment and exploration of the technology.

Global CEOs are making generative AI a top investment priority. The survey shows that 70 percent are investing heavily in generative AI as their competitive edge for the future, with most (52 percent) expecting to see a return on their investment in three to five years. In fact, increased profitability was cited as the number one benefit of implementing generative AI within an organization (22 percent). 

According to our recent KPMG global tech report, 55 percent of organizations said progress toward automation has been delayed because of their concerns about how AI systems make decisions.

Despite a willingness to push forward with their investments, global CEOs recognize that emerging technologies can introduce risks that should be addressed. Fifty-seven percent cite ethical challenges as the top concern when it comes to implementing generative AI, followed closely by a lack of regulation. As scrutiny and regulation of AI increases, organizations may need policies and practices they can articulate and apply with confidence.

CEOs are also grappling with how AI technologies have heightened cyber security risks. Despite how AI may help detect cyber attacks, 82 percent believe it could also bring about new dangers by providing new attack strategies for adversaries. And even with all the attention that has been placed on cyber security in the past few years, more than a quarter (27 percent) of CEOs still are not prepared for a possible cyber attack (up from 24 percent last year) while more than half (53 percent) say they are.

It is essential for CEOs to lead from the front, ensuring their organizations adopt responsible, robust AI frameworks and focus on safeguarding and governance.

Luxembourg CEOs' perspective on generative AI

Generative AI is their top investment priority

Ethical challenges are the number one concern when it comes to implementing generative AI

AI may provide new attack strategies for adversaries

Technical capability and skills to implement AI present a challenge to implementing generative AI

A lack of regulation within the space of generative AI will present a challenge to implementing the technology

Source: KPMG 2023 CEO Outlook

People in a meeting room

This year’s challenging global landscape underscores the pressures CEOs feel to make decisions on a variety of critical issues — and they impact how CEOs plan to support and attract talent over the next three years.

Notably, global CEOs are steadfast in signaling their support of pre-pandemic ways of working, with a majority (64 percent) anticipating a full return to office is only three years away. This remains consistent with their views in the 2022 CEO Outlook. What’s more, 87 percent of CEOs say they are likely to reward employees who make an effort to come into the office with favorable assignments, raises or promotions.

This sentiment underscores the persistence of traditional office-centric thinking among CEOs. It comes against a backdrop of the debate surrounding hybrid working, which has had a largely positive impact on productivity over the past three years and has strong employee support, particularly among the younger generation of workers. As organizations continue to roll out their return-to-office plans, it is crucial that leaders take a long-term view that embraces the employee value proposition and encompasses the considerations and needs of employees to ensure that talent is nurtured and supported.

While there is broad alignment on the importance of inclusion, diversity and equity (IDE), there continues to be concern around the pace of progress. Two-thirds of global CEOs (66 percent) maintain that progress on inclusion and diversity has moved too slowly in the business world and a strong majority (72 percent) say that achieving diversity in workplaces requires implementing a change across the senior leadership level.

CEOs' views on return to office

Of CEOs anticipate a full return to the office in 3 years.

Say they are likely to reward employees (like with favorable work, raises, promotions) who make an effort to come into the office.

Two women with laptop in garden

ESG is increasingly being recognized by CEOs for what it is: an indispensable part of their corporate strategy that helps ensure their business is resilient and can deliver long-term growth — even when faced with numerous geopolitical and economic challenges.

Despite a polarizing debate surrounding the term ESG, CEOs recognize that it remains an integral part of their business operations and corporate strategies — and are taking a more outcomes-based approach. More than two-thirds (69 percent) of global CEOs have fully embedded ESG into their business as a means to create value. It is also important to note that 35 percent of CEOs say they have changed the language they use to refer to ESG both internally and externally, reflecting a shift in the dialogue about ESG and signaling a trend toward prioritizing the areas that make the most sense for their organizations.

While global CEOs believe they are still a few years away from seeing a return on their ESG investments, they recognize the importance it has with their customers and on their brand. Nearly a quarter (24 percent) believe that, over the next three years, ESG will have the greatest impact on their customer relationships, and a further 16 percent believe it will help build their brand reputation.

Global CEOs are keenly attuned to new regulations and shifting politics when it comes to ESG. Despite this, 68 percent indicate that their current ESG progress is not strong enough to withstand potential scrutiny from stakeholders or shareholders. The difficulty in balancing progress with business growth is further supported in our ESG Assurance Maturity Index, where more than half of senior executives that consider themselves ready for ESG assurance said it was a challenge to balance assurance goals with the profit expectations of shareholders.

Luxembourg CEOs' perspectives on ESG

CEOs have fully embedded ESG into their business as a means to value creation.

Current ESG progress is not strong enough to withstand potential scrutiny.

The scrutiny of organizations’ diversity performance will continue to increase over the next 3 years.

Source: KPMG 2023 CEO Outlook

Where do you see your ESG strategy having the greatest impact over the next three years?


  1. Building customer relationships
  2. Shaping capital allocation, partnership, alliances and M&A strategy


  1. Building brand reputation
  2. Attracting the next generation of talents

Source: KPMG 2023 CEO Outlook

Exploring opportunities for growth


  • Embrace generative AI in a way that is ethical, makes the most sense for your business and keeps the needs of your employees and clients at the forefront.

  • Stay up to date with cyber-attack strategies so you and your employees do not expose the business to risk.


  • Take a long-term view when it comes to employees’ desire for hybrid or remote working to ensure that talent is nurtured and supported.

  • Set the tone at the top. Senior leadership should make IDE a stated priority, set real targets, fund initiatives and appoint management to lead programs with clear accountability.


  • Position ESG as a driver for value creation when it comes to business growth, rather than as a risk to be managed. New avenues open when ESG is considered in the growth conversation.

  • Stay attuned to shifting ESG regulations to help maintain your business’s brand reputation and client relationships.

  • Focus ESG investments on areas in line with your values and those of the business.

Find out more about the global results here