PETALING JAYA: Only 22% of chief executive officers (CEOs) in Asia Pacific remain confident on the global economy’s growth prospects over the next three years, a significant drop from 67% reported in January, according to the 2020 KPMG Global CEO Outlook report.
At the same time, the CEOs surveyed are more assured of the resilience of their own business, as 63% expressed confidence in their company’s growth for the same time period.
The report aims to measure how CEOs’ priorities and concerns have changed during the global pandemic by conducting two surveys, at the onset of the pandemic in January and a second survey in July/August.
The study found business leaders have shifted their perspectives as businesses and governments around the world continue assessing the long-term impact of Covid-19, which translates to a shift in prioritising digital transformation, talent and environmental, social and governance (ESG) factors at the top of their agendas during this period of uncertainty.
KPMG Malaysia’s managing partner, Datuk Johan Idris, commented that a majority of CEOs have undertaken critical measures to bolster their company’s medium-term resilience.
He pointed out that this is evident by the decision to maintain business-as-usual activities by business leaders worldwide in response to the movement restrictions at the height of the crisis.
“With the extension of the recovery movement control order (RMCO) until Dec 31, 2020, business leaders are forced to relook at their operational strategies and key to this is the ability to move away from short-term measures and prepare for mid and long-term growth,” Johan said in a press release.
One of the efforts towards long-term growth has been the allocation of resources towards digital transformation initiatives, with 46% of CEOs reporting that progress for their digitisation of operations has sharply accelerated, putting them years in advance of where they expected to be.
In addition, 61% stated they plan to prioritise more capital investment in buying new technology and digitisation.
CEOs have identified talent risk, which encompasses recruitment/retention, overall wellbeing and health of staff, as the highest perceived threat to long-term growth. This could reflect the challenges faced with recruiting and retaining personnel while motivating the workforce despite disruption to the usual ways of working.
According to the report, 72% of CEOs said remote working caused them to make significant changes to their policies to nurture culture, while 69% reported how remote working has widened their potential talent pool for future hires.
There has also been a rise in supply chain concerns, as 72% surveyed have had to rethink their global supply chain approach given the disruptive impact of the pandemic.
In addition, the report saw 78% of CEOs in Asia Pacific to develop a stronger emotional connection to their organisation’s purpose, with 66% stating how they responded to the pandemic by shifting focus towards the ‘Social’ component of their Environmental, Social, and Governance programme.