CEOs bullish on growth and embracing social responsibility, agree with an expanded view of company’s purpose and are broadly optimistic about the year ahead, even as they hedge against uncertainty

New York, New York; JANUARY 13, 2020 – A new survey of CEOs by GLG shows that chief executives enter 2020 bullish about their companies’ futures and broadly optimistic about the global economy overall. 80% are confident that their company’s revenue will grow in the next 12 months and 51% think global growth will increase, while less than a quarter believe the U.S. will enter a recession in 2020.

The research is from a new GLG survey of more than 100 current North American CEOs across a range of sectors. The survey was conducted in November and December 2019 and collected both quantitative and qualitative data.

Following rising expectations in 2019 that businesses contribute to social progress, roughly 90% of survey respondents said that they agree with the Business Roundtable’s recent policy statement that corporations should be responsible not only to shareholders but also to customers, employees, communities, and suppliers. The survey also reveals that CEOs plan for their companies to actively contribute resources to advance social progress in key areas this year:

• 85% plan to contribute money and/or in-kind services to combat climate change.
• 62% plan to change hiring practices to advance gender parity.
• 57% plan to change hiring practices to advance racial justice.

“This data provides useful insight into what a broad cross-section of CEOs are thinking at the outset of 2020,” said John Paul Lee, GLG’s Head of Surveys. “It’s an encouraging benchmark, as we enter what promises to be another year of fast-moving developments in the economy and society.”

Despite optimism overall, CEOs acknowledge hedging against continued uncertainty in the macroeconomic environment. More than 60% of respondents said that geopolitical uncertainty will impact the availability and cost of capital and resources within their organizations in 2020. To mitigate these risks, CEOs are contemplating a range of strategies. Among a range of possible actions:

• 69% said they were likely to re-engineer costs or seek lower cost suppliers.
• 35% said they were likely to seek sales in alternative countries, regions, or blocs.
• 19% said they were likely to relocate production and operations.

In open-ended responses, several CEOs indicated they have already reduced their presence in China or are contemplating doing so to mitigate exposure to the U.S.-China trade war. Others commented that uncertainty in the broader environment has led them to focus more narrowly on their core business operations, and in some cases to defer investments:

• Technology CEO: “We are diversifying away from Chinese manufacturing and business partners due to tariffs and unpredictable regulatory decisions by the U.S. government.”
• Retail CEO: “The only true way to prepare for uncertainty is to focus on core aspects of one’s business. In our situation we have to double our focus on hiring the right people, maintaining low inventories with flexibility to buy when necessary, and avoid excessive investment/expansion.”
• Healthcare CEO: “We are facing a lot of uncertainties in 2020. My primary responsibility will be to focus our business in a direction that makes us sustainable going forward.”
• Finance CEO: “Geopolitical uncertainty and volatility provides additional opportunities [and] we are positioning our firm to take advantage of this.”

In an era of historically low unemployment and continuing technological change, human capital continues to be a central priority for CEOs. Sixty percent of respondents expect their company’s headcount to increase in 2020, with talent acquisition and retention topping the list of workforce concerns at 75% and 59%, respectively. And while only 19% of CEOs expect their company’s headcount to decrease in 2020, more than a quarter of those who do attribute that expected decrease to automation and technology.

“This CEO survey provides a crucial window into the minds of the business world’s decision makers,” said Lee. “It’s clear that CEOs continue to grapple with the pace of change and conflicting streams of information across a range of strategic and tactical focus areas.”

To read the report, click here.

About GLG (Gerson Lehrman Group)

GLG is the world’s knowledge marketplace. We connect decision makers to insights from experts, so they can act with the confidence that comes from true clarity. Our network of 700,000 professionals is the world’s largest and most varied source of first-hand expertise, and we recruit hundreds of new experts every day. We bring the power of insight to every great professional decision. Visit glginsights.com.