When Mazars questioned 800 executives around the world for our annual C-suite barometer, the most significant thing we found was: fighting spirit. Confidence and optimism—in the face of the most severe geopolitical and economic challenges—both remain high.
This may seem counterintuitive. After all, conditions are not exactly propitious. The world is still emerging from the pandemic and the invasion of Ukraine, and is managing significant changes in inflation and interest rates. There is no doubt that companies and their leaders have been tested.
And yet, despite all of this, the C-suite is optimistic. The results of the Mazars C-Suite Barometer reveal that 86% of those polled have a “positive outlook” for growth in 2023, a significant figure when the range of problems facing the global economy are taken account.
Of those expecting growth, close to half, 46%, say it will be organic; for 39% it will be through strategic alliances or joint ventures; and 15% say it will be mergers and acquisitions. The C-suite clearly feels it has options.
That’s not to say business is not worried. A hefty 62% say the factor most likely to hold them back is “economic uncertainty”.
While uncertainty is a significant factor, optimism remains high. That may be because action begets hope and there are two key areas in which corporate leaders are acting and have reason to be hopeful: technology and sustainability.
Over the next three to five years, boardrooms have much to occupy their attention. Nearly a third, 32%, say that transforming company technology is a “top strategy priority”. Almost the same proportion, 29%, say revising their sustainability strategy also sits atop their to-do list.
Alongside these topics, leaders also identify “attracting talent” and “establishing a diverse team” as major contributors to success.
Technology and sustainability
Technology will be critical. The C-suite must understand emerging technologies and fully engage with the digital world. The launch of generative AI platforms such as ChatGPT and Bard, as well as a host of others, have only served to illustrate what a priority technology has become. Big Data, Web3, the metaverse and automation are among the other technological investments the C-suite must understand.
There are clear signs executives have taken this to heart. Over half, 54%, of those polled are very confident in their company’s ability to navigate new technologies, with a further 39% “somewhat confident”.
On sustainability, 68% of companies are planning to increase investment and 65% already produce a sustainability report.
There are challenges, of course. When it comes to the quality of data reporting and data tracking, there remain significant obstacles, although there is improving confidence in regards to what data to include and the internal resources needed to process everything. Concerns about publicly drawing attention to sustainability areas in need of improvement are decreasing, though worries are by no means entirely quashed.
Sustainability reporting is also still struggling to find a home inside organisations. Chief sustainability officers are tasked with this at 29% of organisations while, for a quarter, it is the CEO. Elsewhere, CFOs, chief risk officers and heads of corporate affairs are in charge.
The general direction of travel, however, is cause for optimism, though developments are not as fast as they should be. That said, evidence is growing that C-suite leaders recognise the importance of sustainability for the future of their organisations, the economy and the planet. Perhaps most importantly though, it shows that the C-suite isn’t just reacting to events, but moving to shape the future.
Another aspect of ESG weighing on the C-suite is talent and diversity. Difficulty in recruiting skilled workers is cited by 28% as a factor holding back growth. A third say diversity is a top three management issue, while more than half of those questioned have a dedicated project for gender equality and beating sexism.
Leaders want their work culture to attract talent and are focused on teamwork and camaraderie, the quality of colleagues and opportunities for promotion as key elements in their efforts to make workplaces more attractive. Remote working still plays a part, with 90% of companies allowing some form of flexible working.
While all this sounds positive, only 44% of the C-suite could say women made up 30% of their top decision-makers. Without doubt, women remain underrepresented at the top of companies. Progress made so far is clearly not enough, especially given the fact that the barriers are well known.
Leaders have to be willing to engage with gender diversity and ensure it is a strategic priority. Clear targets, understanding, action plans, education, HR processes and policies, and incentives based on solid achievements will all make the difference.
Companies intending to win the “talent war” are those that offer opportunities to all, including those who do not match the traditional image of leadership.
The rest of 2023 is likely to see just as much volatility as last year. The causes of uncertainty aren’t going anywhere soon.
Companies are, however, in a better place than they once might have been. The financial crisis and the pandemic have made them more resilient and this quality will stand them in good stead.
And resilience means seeing the road ahead and investing for the future. When it comes to technology, sustainability and diversity, C-suites are doing just that. Being bold today will achieve sustainable success tomorrow.
Mark Kennedy is partner, audit & assurance, at Mazars. Read the full report here.