KPMG 2022 CEO Outlook: Asia Pacific

CEOs in the region do not share the expectation of their counterparts elsewhere of a recession in the near future. However, they are acting to protect and develop their businesses.

Two-thirds of executives in the region are devoting capital investment into new technologies to mitigate the effects of a challenging labour market.

ASPAC CEOs are less bullish than their global counterparts about ESG impact on financial performance. A third of them struggle to articulate a compelling ESG story, but more than two-thirds acknowledge that ESG challenges such as income inequality and climate change pose a threat to their company.

ASPAC CEOs, unlike their global counterparts, are not expecting another recession

In September 2022, we asked executives how confident they were in the resilience of the global economy in the next six months, their country, their industry and their company, given expectations of a recession.

Importance of retaining talent

Attracting and retaining high-quality talent remains a key priority for business leaders in ASPAC, as in the rest of the world. However, the majority of ASPAC CEOs are devoting investment towards new technology. Inflation and the looming short recession are prompting many to implement a temporary freeze on hiring; some firms are also downsizing their labor force.

ASPAC executives less bullish than others about the ESG impact on financial performance

ASPAC CEOs recognise the importance of ESG initiatives on their businesses, especially with regards improving financial performance, driving growth and meeting stakeholder expectations. At the same time, most of them are feeling the pressure of an increasing public perception that it is up to corporations to deliver, as confidence and trust in governments decline.

ASPAC CEOs, as with their global counterparts, value digital transformation

Despite the accelerated pace of digital transformation, companies all over the world appear from our survey to be coping well, while taking seriously the challenges involved. A majority of business leaders polled in the Asia Pacific region say that their organization already has an aggressive digital investment strategy, intended to secure first-mover or fast-follower status. This claim is aligned with the importance given to digital transformation strategies in ensuring business success.

Enterprises’ digital transformation strategies are also driven by risk aversion, though technology is not at the top of the list of dangers. For many ASPAC CEOs, deciding on the right technology is holding back progress on their business transformation, suggesting that there is a widespread need for more preparatory research and due diligence in adopting new technology. In this regard, forging new partnerships will be critical to continuing companies’ rapid pace of digital transformation.

The 2022 Asia Pacific (ASPAC) CEO Outlook, based on a survey of 1,325 CEOs worldwide, including 180 from ASPAC, provides unique insight into the mindset, strategies and planning tactics of CEOs that shows the extent to which ASPAC companies concur with their counterparts in the rest of the world—and how they differ—as well as recording changes since our the relatively stable period before the pandemic and the Russian invasion of Ukraine.

All companies surveyed have annual revenues over US$500M and a third of them worldwide and over two-fifths in ASPAC have more than US$10B in annual revenue. Changes in attitudes and actions over the year as a whole are traced by comparing the results of the Outlook survey with those recorded in the Pulse survey conducted in early February with 500 firms worldwide, including 160 in the Asia Pacific region.