Opinion
Business

CEOs today are under pressure: Here's how they can rise above divisions and become the voice of reason

A woman leading a boardroom meeting, illustrating the pressures now facing CEOs

For better or for worse, expectations have been raised, and CEOs must meet the challenges of this new age. Image: Photo by Christina @ wocintechchat.com on Unsplash

Simon Freakley
Chief Executive Officer, AlixPartners
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Global Cooperation

This article is part of: World Economic Forum Annual Meeting
  • More is demanded from business today than ever before.
  • The list of issues on which CEOs have a platform to take a stand is extensive and growing, from workplace conditions to immigration to climate change.
  • For better or for worse, expectations have been raised, and CEOs must meet the challenges of this new age.

Times are changing. Or perhaps it would be more accurate to say that they have changed.

More is demanded from business today than ever before. Workers expect to hear their employer vocally support the social causes they do. Consumers want to buy from brands that align with their values. Investors are directing management to use criteria beyond economic profits to make business decisions, igniting a backlash in certain quarters and further complicating the picture.

At the same time, people have lost faith in institutions such as the media and government. For the past three years, the Edelman Trust Barometer has found that business is the most trusted institution globally and the only one seen as “competent and ethical.”

Many CEOs, understandably, are unsure whether and how to step into that void. In a world that is fracturing both within societies and between countries, however, CEOs have an opportunity — and, indeed, a responsibility — to take a more outspoken role as a voice of reason, rising above these divisions.

How CEOs can use their platforms

A world of greater peace and growing prosperity is better for everyone. Using our platforms as CEOs to push that agenda strikes me as both non-controversial and essential. Not only can this help at the macro level, but it is also the right thing to do for our businesses.

The list of issues on which CEOs have a platform to take a stand is extensive and growing: from workplace conditions to immigration, from climate change to managing the pace of technological change. But that does not make it easy—quite the contrary.

The role of the CEO is unique: they report to no one (within their organization) but are accountable to everyone. That leads to a set of pressures and responsibilities that are acutely felt. Today, more than ever.

In our latest AlixPartners Disruption Index, CEOs report:

• Being highly disrupted: 15 points greater than the average executive.

• Needing to significantly change their business model over the next year: 19 points above average.

• Falling behind on knowledge base and skill sets: 30 points above average.

• Needing more support and advice to be successful: 20 points above average.

• Worrying about losing their job: 28 points above average.

Have you read?

CEOs are under pressure

I have said it before: CEOs are truly in the hot seat and fear that they are in the ejector seat. CEOs feel disruption more keenly, are more determined to respond aggressively and are frustrated when they sense a lack of equal urgency from their teams.

ceo anxiety

At least in part, this pressure comes from the fact that many of the most intractable challenges are outside their control. In this year’s Disruption Index, the three biggest threats executives cited are 1) interest rates and inflation, 2) ageing populations, and 3) geopolitical conflict.

On the latter, U.S./China tensions dominate, with 62% of CEOs telling us that they are adjusting their strategy on the back of rising pressures. In the third quarter of 2023, foreign direct investment in China turned negative for the first time since the government began reporting on it 25 years ago.

However, there is a limit to which companies can pursue this strategy, which is why most U.S. and European CEOs report 'de-risking' with China and not 'decoupling.'

And then there is the demand side. Many multinational corporations rely on China for a significant portion of their revenues. Losing access to this market would be disastrous, impacting growth and employment globally.

CEOs on the frontline

Business has found itself on the frontline of this superpower conflict and this is why I felt compelled to take a public stand on why we cannot afford a new cold war.

Similarly, ageing workforces in many major economies may require CEOs to become more vocal on immigration issues. About 20% of respondents to our survey said that finding enough employees with critical skills was the workforce issue that had most impacted the overall growth of their company over the past 12 months, and shortages across the skill spectrum bedevil a host of industries. These shortages are likely to get more acute in the coming years as baby boomers accelerate their retirements.

At the same time, immigration has become increasingly polarizing, helping drive the election of populist politicians in Europe and the U.S. and making political compromise on immigration difficult. In the U.S., Congress has been unable to pass any significant change to immigration policy in over 20 years. I believe CEOs in the crosshairs on this issue can be voices of reason, common sense and compromise.

And, there are plenty of other thorny issues facing our societies today – including the climate transition and AI regulation – that require strong leadership from the business community to be overcome.

There may never have been a time when “the business of business is business,” but if there was, that time has passed. For better or for worse, expectations have been raised, and CEOs must meet the challenges of this new age.

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