CEOs see slower economic growth in 2020

- CEOs in every region across the world predict slower economic growth

- Confidence in companies’ own revenue growth lowest since 2009

- Findings from PwC’s 23rd Annual Global CEO Survey

CEOs are showing record levels of pessimism in the global economy, says PwC, with 53% predicting a decline in the rate of economic growth in 2020.

Source: PwC. Regression analysis on change in CEO confidence against GDP growth.

This is up from 29% in 2019 and 5% in 2018, the highest level of pessimism since the consultancy started asking the question in 2012. In contrast, the number of CEOs projecting a rise in the rate of economic growth dropped from 42% in 2019 to 22% in 2020.

These are some of the findings of PwC’s 23rd survey of almost 1,600 CEOs from 83 countries across the world, launched at the World Economic Forum annual meeting in Davos, Switzerland.

The pessimism is even more pronounced in Singapore with 84% of CEOs expecting global GDP growth to decline over the next 12 months and only 6% expecting it to improve. Two years ago CEOs in Singapore had a record level of optimism, where 57% expected an increase in GDP growth.

Yeoh Oon Jin, Executive Chairman, PwC Singapore said: “2019 was not an easy year for business leaders in Singapore, with record low GDP growth in Singapore and a highly volatile geopolitical environment globally. In addition to external pressures, many businesses are still on their digital transformation journeys and are embarking on upskilling programmes for their employees, both of which will require significant investments in the near term. It is therefore not surprising that while GDP is expected to pick up in 2020, only about one in four CEOs in Singapore are confident in revenue growth for the next 12 months.”

CEOs are also not as positive about their own companies’ prospects for the year ahead, with 25% of CEOs in Singapore saying they are “very confident” in their own organisation’s growth over the next 12 months (27% globally, 29% in the Asia Pacific region).

Global CEO sentiment about their own revenue growth prospects has proven to be an excellent predictor of global economic growth. Analysing CEO forecasts since 2008, the correlation between CEO confidence in their 12-month revenue growth and the actual growth achieved by the global economy has been very close. If the analysis continues to hold, global growth could slow to 2.4% in 2020, below many estimates including the 3.4% October growth prediction from the IMF.

In 2019, when asked about the top threats to their organisation’s growth prospects, uncertain economic growth ranked outside the top 10 concerns for CEOs globally, at No. 12. This year it leapt to third place, just behind trade conflicts – another risk that has risen up the CEO agenda – and the perennial over-regulation, which has topped the table as the No. 1 threat for CEOs globally.

In Singapore, trade conflicts* (97%) emerged as the top concern for CEOs, followed by uncertain economic growth (94%) in second and then protectionism (88%). The top three concerns point towards the strong influence that the global environment has on Singapore as a globalised economy.

Technology

While CEOs around the world express clear concerns about the threat of over-regulation, they are also predicting significant regulatory changes in the technology sector. Globally, over two-thirds of CEOs (75% in Singapore) believe that governments will introduce new legislation to regulate the content on both the Internet and social media and to break up dominant tech companies.

A majority of CEOs (51% globally, 59% in Singapore) also predict that governments will increasingly compel the private sector to financially compensate individuals for the personal data that they collect.

Skills

While the shortage of key skills remains a top threat to growth for CEOs and they agree that retraining/upskilling is the best way to close the skills gap, they are not making much headway in tackling the problem with only 16% of Singapore CEOs (18% globally) saying they have made “significant progress” in establishing an upskilling programme.

Top challenges Singapore CEOs faced when it comes to upskilling were employees’ ability to learn new future skills (22%) and retaining upskilled employees (19%). Despite the challenges around digital upskilling, there are visible signs of progress. A third of CEOs in Singapore said that upskilling programmes were very effective in driving greater innovation and accelerated digital transformation while two-fifths of CEOs linked it to higher workforce productivity.

Yeoh said, “In the quest for greater innovation, transformation and productivity through upskilling of the workforce, a key factor for success is a clear plan that is strategically aligned to meet business needs. Organisations must clearly identify skills gaps and mismatches, build a futureproof skills strategy and lay the necessary cultural foundation. Without these building blocks in place, business leaders risk implementing programmes that are not in line with their futureproofing strategies.”

Climate change

Globally, CEOs are also increasingly concerned about cyber threats and climate change and environmental damage. Climate change is still not in the CEOs’ top 10 threats to growth, having been overshadowed by other threats despite the increasing number of extreme weather events and the intensity of debate on the issue.

Although climate change does not appear in the top ten threats to CEOs’ growth prospects, CEOs are expressing a growing appreciation of the upside of taking action to reduce their carbon footprint. Compared to a decade ago, when we last asked this question, CEOs are now twice as likely to “strongly agree” that investing in climate change initiatives will boost reputational advantage (30% in 2020 compared with 16% in 2010) and 25% of CEOs today compared with 13% in 2010 see climate change initiatives leading to new product and service opportunities for their organisation.

Views from CEOs in Singapore are even stronger with 50% saying they ‘strongly agree’ that there will be reputational advantages and 41% seeing new product and service opportunities.

However, for these opportunities to turn into long term success stories, the principles of climate change need to be embedded right across a businesses’ supply chain and customer experience.

Explore:

Read PwC’s 23rd Annual Global CEO Survey – Singapore Report

Download the global report

Watch the associated video

*PwC conducted 1,581 interviews with CEOs in 83 countries, of which 32 were from Singapore, between September and October 2019.

The sample is weighted by national GDP to ensure that CEOs’ views are fairly represented across all major regions. Seven percent of the interviews were conducted by telephone, 88% online, and 5% by post or face-to-face. All quantitative interviews were conducted on a confidential basis.

Forty-six percent of companies had revenues of US$1 billion or more; 35% of companies had revenues between US$100 million and US$1 billion; and 15% of companies had revenues of up to US$100 million. Fifty-five percent of companies were privately owned.

**It should be noted that the survey was conducted in September and October 2019, before the US-China trade war deal signed in January 2020.

ASEAN CEOs cautious in face of economic slowdown

Source: PwC. Cover for the 22nd annual survey of CEOs.

Nearly 30% of business leaders globally believe that global economic growth will decline in the next 12 months, approximately six times the level of 5% last year – a record jump in pessimism. This is one of the key findings of PwC’s 22nd annual survey of over 1,300 CEOs around the world, launched at the World Economic Forum annual meeting in Davos, Switzerland.

CEOs across members of the Association of Southeast Asian Nations (ASEAN) reflected greater pessimism with almost half (46%) believing that global economic growth would decline. On the other hand, one in three CEOs (32%) in ASEAN forecast an improvement in global economic outlook, lower than the global average of 42%.

Yeoh Oon Jin, Executive Chairman, PwC Singapore said, “CEOs’ views of the global economy which generally mirror the major economic outlooks, are adjusting their forecasts downward in 2019. With the rise of trade tension and protectionism it stands to reason that business confidence is waning. This is especially so in ASEAN this year, with ASEAN CEOs showing even greater pessimism than their global counterparts. This is in stark contrast to sentiments over the past few years where we have been seeing greater optimism in Asia."

The unease about global economic growth is lowering CEOs’ confidence about their own companies’ outlook in the short term. Only thirty-five percent of CEOs globally, and 33% in ASEAN, said they are ‘very confident’ in their own organisation’s growth prospects over the next 12 months.

As indicators predict an imminent global economic slowdown, CEOs have turned their focus to navigating the surge in populism in the markets where they operate. Trade conflicts, policy uncertainty, and protectionism have replaced terrorism, climate change, and increasing tax burden in the top ten list of threats to growth globally.

In ASEAN, trade conflicts came out the top threat amongst CEOs at 83%, with geopolitical uncertainty and policy uncertainty following closely behind at 81% and 78% respectively. A majority of CEOs in ASEAN are taking a strong reactive approach to this geopolitical shift, with 29% adjusting supply chain and sourcing strategy, 29% delaying capex and 17% adjusting their growth strategy to different countries.

This year’s survey took a deep dive into data and analytics as well as artificial intelligence (AI).

This year’s survey revisited questions about data adequacy first asked in 2009. It was found that CEOs continue to face issues with their own data capabilities, resulting in a significant information gap that remains 10 years on. Despite billions of dollars of investments made in IT infrastructure over this time period, CEOs report that they are still not receiving comprehensive data needed to make key decisions about the long-term success and durability of their business.

Leaders’ expectations have certainly risen as technology advances, but CEOs are keenly aware that their analysis capabilities have not kept pace with the volume of data which has expanded exponentially over the past decade. When asked why they do not receive comprehensive data, CEOs in ASEAN point to the ‘lack of analytical talent’ (53% in ASEAN, 54% globally), ‘poor data reliability’ (53% in ASEAN, 50% globally), and ‘inability to quantify external information’ (50% in ASEAN, 40% globally) as the primary reasons.

When it comes to closing the skills gap in their organisation, CEOs agree that there is no quick fix. Forty-two percent of business leaders in ASEAN see significant retraining and upskilling as the answer (46% globally), with 22% also citing establishing a strong pipeline directly from education as an option (17% globally).

Yeoh Oon Jin, Executive Chairman, PwC Singapore said, "The lingering skills gap that is so apparent this year points to the importance of bringing together the best of man and machine, in this technological era. While machines are increasingly being used to generate more accurate statistical trends and automate systems, it is becoming clearer that the analytical and reasoning skills of the human are growing in importance and at least for now, irreplaceable. As businesses start integrating more analytics and technology into their day-to-day operations, there is naturally an increased demand for professionals with strong data and digital skills."

Eighty-seven percent of CEOs in ASEAN (85% globally) further agree that AI will dramatically change their business over the next five years and 62% believe AI will displace more jobs than it creates (49% globally).

Despite the bullish view on AI, one in three CEOs (36% ASEAN, 23% globally) currently have ‘no current plans’ to pursue AI, with a further 32% (35% globally) ‘planning to do so’ in the next three years. Twenty-eight percent have taken ‘a very limited approach’ (33% globally) and one in twenty CEOs have implemented AI on a wide scale (4% ASEAN).

Yeoh concludes, “The potential of AI is immense, but in order for us to make this next quantum leap and fulfil the promise of AI, organisations from both the public and private sector must work hand in hand and be committed to deliver on the educational, governance, innovation and commercial considerations."

Explore:


Download the global report

Notes:

- PwC conducted 1,378 interviews with CEOs in 91 countries between September and October 2018. The sample is weighted by national GDP to ensure that CEOs’ views are fairly represented across all major regions. Ten percent of the interviews were conducted by telephone, 73% online, and 10% by post or face-to-face. All quantitative interviews were conducted on a confidential basis. About half (48%) of companies had revenues of US$1 billion or more: 36% of companies had revenues between US$100 million and US$1 billion; 15% of companies had revenues of up to US$100 million; 59% of companies were privately owned.  

- All figures refer to CEOs across ASEAN unless otherwise indicated.
 
- ASEAN member economies surveyed include Cambodia, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
 
Get more information on the ASEAN cut

Influential Brands unveils award winners for 2017

Influential Brands has named six CEOs Top CEO of the Year at the 5th edition of the CEO Asia Conference held in Singapore on 7 November. The 2017 conference, themed The Future of Business in Asia, was held in collaboration with knowledge partner Deloitte Singapore, education partner, SIM, and official car Rolls-Royce Motor Cars.

Among the awards* presented at the event were Top CEO of the Year, Top Influential Brands, Outstanding Brands, Influential Artist of the Year and Influential Woman of the Year. Some 400 C-suite executives from over 100 leading companies across the region including Indonesia, Malaysia, Thailand and China attended the event. 

Source: Influential
Brands.

Jorge Rodriguez, MD, Influential Brands said, “All awardees of the Top CEO of the Year awards are business leaders from Asia representing diverse sectors from the consumer industry. Chow Tai Fook is a prominent leader in (mainland) China and Hong Kong, Thai Beverage is a market leader in Thailand and in the region, NTUC FairPrice is a dominant player in the grocery sector in Singapore, Success Resources is the global market leader in people development, Hatten Land is a developer with an award-winning portfolio of integrated residential, hotel and commercial developments in Melaka and finally, ONE Championship has expanded to become the Asia’s largest martial arts event company.

"The six Top CEO awardees have demonstrated not only their capacity to lead their organisations but also their ability to understand clearly what consumers expect from them."

Rodriguez added that three factors will drive business success.

- Dynamic connections: consumers will decide how, when and where to buy

- Meaningful branding and innovative products: consumers will be drawn to a brand that has a purpose and is always innovating its products

- Right associations and partnerships: consumers will find the most efficient way to get what they want hence brands must increase brand exposure and leverage on strategic partnerships

"Influential Brands exists for these reasons of fostering dynamic connecting, building channels for brand education and facilitating partnerships and opportunities in Asia," he said.

Thirty-three brands were named in the Top Influential Brands awards and another four as Outstanding Brands. Old Chang Kee was recognised under Influential Brands Hall of Fame for its appeal to consumers across generations. The brand has been a winner for five consecutive years under the Influential Brands Top Influential Brands award category.

Two new individual awards were introduced this year. Iskandar Jalil, Singapore's celebrity potter, won the inaugural Influential Artist of the Year award. The first Influential Woman of the Year award went to Christine Tan, anchor for CNBC's Managing Asia programme.

“The role of the CEO exists at the intersection of the external environment and the internal organisation. In today’s disruptive marketplace, it is not possible for CEOs to shield their organisations from ambiguity,” said Philip Yuen, CEO, Deloitte Southeast Asia and Singapore.

“At Deloitte, we harness our organisation’s broad capabilities to deliver forward-thinking and fresh insights for every stage of a CEO’s career through Deloitte’s CEO Programme – supporting CEOs in their strategic agenda to manage the complexities of their roles, tackle their companies’ most compelling challenges, and adapt to strategic shifts in the market. In this spirit, I would like to congratulate the award winners and wish them continued success.”

Rolls-Royce Motor Cars, the official car for the event, introduced the Rolls-Royce Ghost and the Wraith, a two-door coupé, at the award ceremony.

Paul Harris, Asia Pacific Regional Director for Rolls-Royce Motor Cars said, “Rolls-Royce has always been the choice for industry titans, and the movers and shakers of the business world. To maintain our pinnacle position means also constantly evolving and integrating cutting-edge technology to create the best in luxury. We are supporting Influential Brands’ CEO Asia Conference as it is a unique platform to support the regional business arena, while showcasing our brand of luxury to highly-successful individuals.”

Deloitte has also released a white paper, Scaling Edges – A Pragmatic Pathway To Broad Internal Change, in conjunction with the event. In the paper, the consultancy advised companies to reconsider how they innovate today, typically by flooding the market with new, marginally improved products or services, to "innovating at an institutional level" instead in the era of the "Big Shift", what Deloitte terms the current environment where we are experiencing increased globalisation and rapid advancements in technology. 

"This change requires firms to rethink even the primary objective of why they exist and drastically change their management mindset; in today’s rapidly changing landscape, a focus on scale efficiencies is not enough. Though transformative change is required, it is admittedly far from a simple task," Deloitte said in the executive summary of the paper.

Pragmatic Pathways is a new framework for digital transformation that in essence says: 

- Focus on edges rather than the core of a company, as change agents can better identify projects which are most likely to achieve significant and sustainable returns. 

- Leverage external resources rather than internal support to scale in edge projects to circumvent scrutiny and organisational resistance to change.

- Accelerate learning rather than focus solely on short-term outcomes to make edges conduits of transformation.

Details:

Top CEO of the Year 
 
Seah Kian Peng, CEO, NTUC Fairprice Co-operative

Dato Colin Tan, Executive Chairman & MD, Hatten Land

Chatri Sityodtong, Chairman, One Championship

Richard Tan, Chairman, Success Resources Singapore

Kent Wong, MD, Chow Tai Fook Jewellery Company

Thapana Sirivadhanabhakdi, President & CEO, Thai Beverage Public Company 

Influential Woman of the Year 
 
Christine Tan, Anchor, Managing Asia, CNBC

Influential Artist of the Year 
 
Iskandar Jalil, Master & Veteran Potter

Hall of Fame 
 
Old Chang Kee

Top Influential Brands
	Brand Name		Category	Country
1	Raffles Hotel		Heritage Hotel	Singapore
2	Gardens by the Bay		Tourist Attraction	Singapore
3	Lee Hwa Jewellery		Premium Jewellery	Singapore
4	Din Tai Fung		Asian Restaurant	Singapore
5	BreadTalk		Bakery	Asia
6	NTUC FairPrice		Supermarket & Online Grocery Retailer	Singapore
7	Watsons		Retail Loyalty Card & Personal Care Store	Singapore
8	MindChamps		Pre-school Education	Singapore
9	Orange Clove		Caterer	Singapore
10	ERA		Property Agency	Singapore
11	Spectacle Hut		Multi-Brand Designer Optical	Singapore
12	Gain City		Air-con & Home Appliance Retailer	Singapore
13	Huawei		Mobile Phone	China
14	Delsey		Luggage	Asia
15	De Longhi		Premium Coffee Maker	Asia
16	Canon		Camera	Asia
17	Grab		Taxi Booking App	Asia
18	Lazada		Online Market Place	Asia
19	Jean Yip Group		Beauty Centre	Singapore
20	My First Skool		Pre-school Education	Singapore
21	Sunshine		Bread	Singapore
22	SCS		Butter	Singapore
23	CP Group		Frozen Food	Asia
24	Gardenia		Bread	Singapore
25	Skylight		Abalone Premium Gift	Singapore
26	Bonjour		Bread	Singapore
27	Katrina Holdings		Bali Thai, So Pho, Streats	Singapore
28	JobStreet.com		Online Job Search	Asia
29	Central Food Retail Group		Grocery and Convenience Retailer	Thailand
30	Chow Tai Fook		Premium Jewellery	Asia
31	Joy City		Shopping Mall	China
32	Beijing Tong Ren Tang		Traditional Chinese Medicine	China
33	Telkomsel		Telecommunications	Indonesia

Outstanding Brands
	Brand Name		Category	Logo Display
1	Choc Spot		Confectionery Retailer	Outstanding Brands -  Singapore
2	Curry Times		Local Cuisine	Outstanding Brands -  Singapore
3	Prata Wala		Asian Restaurant	Outstanding Brands -  Singapore
4	KIODA		Korean Concept Store	Outstanding Brands -  Malaysia

Explore:

Learn more about Deloitte's Scaling Edges methodology

Read the WorkSmart Asia blog posts about:

The 2015 Top Influential Brands and the winners in 2014

The Rolls Royce Dawn Black Badge

*Criteria for the awards in 2017 include:

Top CEO of The Year

A selected group of six CEOs will be recognised for their exemplary achievements in five areas:

Brand leadership: Leads an organisation that owns prominent brand(s) with strong brand power and high brand equity in the eyes of external and internal stakeholders. Brand power is assessed by Influential Brands' constant market monitoring via surveys and social media listening.

Brand expansion (local and international): Demonstrates an ability to build strong partnerships and takes calculated risks in his/her pursuit of business expansion and market leadership. Proven track record creating new brand concepts within their existing marketplace or taking the brand to uncharted territories in Asia and beyond.

Financial performance: Assessment of business performance based on revenue and other indicators (i.e. new countries, new partnerships, point of sales, etc).

Innovation: Infuses and empowers innovation from within the organisation. Embraces new technology in line with new industry developments and allocates time/resources in research and development (R&D) as an important activity in his/her business.

Personal integrity: Living according to values has earned him/her immense respect from staff, competitors, advisers, family and wider community. Coupled with the ability to communicate ideas, this creates the potential to influence others.

In 2016, the recipients for this segment included:

George Quek, Chairman of BreadTalk Group

Anthony Tan, Co-Founder and CEO of GrabTaxi Holdings

Dr Michael Tan, Co-Founder and Group CEO of Fullerton Healthcare Corporation

Richard Eu, CEO of Eu Yan Sang International

David Chiem, Founder, CEO and Chairman of MindChamps Holdings

Alain Ong, CEO of Pokka International

Influential Woman of the Year award 

In line with the Champions of Excellence programme, the Influential Woman of the Year 2017 Award recognises one woman for her exemplary achievements in three areas: influence, business leadership and personal branding. An intensive assessment based on the following criteria was conducted:

Influence: Demonstrates an ability to infuse a special energy that leads to the generation of a greater impact as a result of her work, presence, values and decisions. Coupled with the ability to communicate ideas, this creates the potential to influence others.

Business leadership: Leads and or fronts an organisation that owns a prominent brand(s) with strong brand power and high brand equity in the eyes of external and internal stakeholders.

Personal branding: Living to values has earned her great respect from staff, competitors, advisers, family and wider community.

Influential Artist of the Year award

One artist will be recognised for his/her exemplary achievement in three areas: influence, contribution to the promotion of arts and culture and personal integrity.

Top Influential Brands awards

The 33 awardees will be brands enjoyed and loved by consumers in Asia. The selection is backed by more than five years of consumer insights and surveys covering Singapore, Indonesia, Malaysia, Thailand and China and more than 5,000 respondents. The Asiawide study was conducted via both face-to-face and online surveys. More than 50 categories from Online Marketplace and Food and Beverage (F&B) to Fast-Moving Consumer Goods (FMCG), Electronics and Beauty & Wellness were covered. The top five brands from each category qualify for this award. 

Outstanding Brands awards

Outstanding Brands was created two years ago to identify, feature and celebrate growth brands that sparkle and have shown resilience and growth in changing times. A brand must not only be noteworthy in its own category, industry or domain, it must show significant growth in revenue year-on-year for the past two years or more. It cannot be in receivership and must have a clear business expansion plan. 

CEOs have to take charge of reskilling their workforces: Accenture

Source: Accenture website. The top skills required to stay relevant at work in the next five years include technical skills, adaptability and problem-solving capabilities.

A new report* by Accenture Strategy cautions that in a rapidly changing digital landscape, CEOs must lead the charge in reskilling their people to be relevant in the future and ready to adapt to change.

According to the report, Harnessing Revolution: Creating the Future Workforce, CEOs must put their people first and at the centre of change to create the future workforce.

The stakes are high for businesses, workers and society as a whole. Development of human skills such as leadership, critical thinking and creative skills, as well as emotional intelligence, would reduce job losses due to total automation considerably. The survey of 10,527 working people in ten countries, including Australia, India, Japan and Turkey, coupled with Accenture Strategy modelling show that if the rate at which workers build relevant skills is doubled, the share of jobs at risk of total automation would be reduced.

“Paradoxically, the truly human skills, from leadership to creativity, will remain highly relevant and winning organisations will strike the right balance — leveraging the best of technology to elevate, not eliminate their people,” said Ellyn Shook, Chief Leadership and Human Resources Officer, Accenture. “Not only are workers optimistic, but they understand they must learn new skills. Digital can accelerate learning by embedding training seamlessly into daily work — so learning becomes a way of life — helping workers and organisations remain relevant.”

Fully 84% of workers surveyed are optimistic about the impact of digital on their job. More than two-thirds think that technologies such as robots, data analytics and artificial intelligence will help them be more efficient (74%), learn new skills (73%) and improve the quality of their work (66%).

Eighty-seven percent of these working people expect parts of their job to be automated in the next five years, ranging from 93% of Millennials to 79% of baby boomers. Of those who expect automation, 80% anticipate more opportunities than challenges in how automation will impact their work experiences in the next five years.

Additional Accenture research shows that artificial intelligence alone has the potential to double the annual economic growth rates and boost labour productivity by up to 40% by 2035 in the 12 developed countries examined.

Additionally, the values of today’s workforce will require leaders to respond with a different range of rewards, benefits and support. According to modelling undertaken by Accenture Strategy and Gallup, non-financial factors, such as well-being, engagement, quality of life and status are equal, if not more important to workers than income and benefits.

“Creating the future workforce now is the responsibility of every CEO. Those leaders who make their people a strategic business priority and understand the urgency of this challenge will be the ones that make the greatest gains in growth and innovation,” said Mark Knickrehm, Group Chief Executive, Accenture Strategy.

To help leaders navigate and shape the future workforce, Accenture Strategy has the following recommendations:

· Accelerate reskilling: From top to bottom, invest in technical and more human skills involving creativity and judgment, taking advantage of the fact that 85% of workers are ready to invest their free time in the next six months to learn new skills.

Scale reskilling by using digital technology. This can include wearable technologies, such as smart glasses that provide technical advice and information as workers carry out tasks. It can also include intelligent software to personalise training that offers recommendations to support an individual’s lifelong learning needs.

· Redesign work to unlock human potential: Co-create role-based, gig-like employment opportunities to satisfy workers’ demands for more varied work and flexible arrangements. Develop platforms through which a range of resources and services can be offered to employees and freelancers alike in order to create a compelling community that keeps top talent loyal.

· Strengthen the talent pipeline from its source: Address industry-wide skills shortages by supporting longer term, collective solutions. These include public private partnerships designed to create a broad adoption of skills training. Work with the education sector to design curricula that develop relevant skills at the beginning of the talent supply chain.

*Accenture combined quantitative and qualitative research techniques in order to analyse how responsive and responsible leadership could help create the future workforce. The research programme is built on three pillars of a survey, econometric modelling and an index, complemented by secondary research and interviews with experts from universities, startups, large corporations and government organisations.

The online survey was conducted in the US, Brazil, UK, France, Germany, Australia, Italy, India, Japan and Turkey of 10,527 workers across skill levels and generations between November 26 and December 9, 2016.

INSEAD study finds shareholder votes on CEO accountability raise company returns

Do shareholder votes improve CEO accountability and reduce corporate excesses? A new paper, Say Pays! Shareholder Voice and Firm Performance, published in the Review of Finance by Maria Guadalupe, Associate Professor of Economics and Political Science at INSEAD, shows that they do.

Prior to Guadalupe's research, there had been a lack of evidence on the consequences of adopting say-on-pay beyond the short-term market reaction. Existing research has generally examined the effect of say-on-pay after it has been legislated, which has produced mixed results.

Guadalupe’s research takes a different approach to isolate a causal estimate of the effects of say-on-pay. She examined 250 cases of proposals to adopt the say-on-pay policy from shareholders of S&P1500 firms between 2006 and 2010, which was before say-on-pay votes were mandatory.

Her conclusion is that say-on-pay has a positive impact on firms’ accounting and operational performance in the years following the vote to adopt say-on-pay. Firms that adopt say-on-pay in her sample have a higher return on assets and operating assets one year after the vote was introduced. The firms also saw a reduction in overheads and capital expenditure growth.

While she discovered no systematic change in the level or structure of CEO compensation itself or the probability of the CEO leaving the firm after a say-on-pay vote, she did find that say-on-pay increases shareholder value by about 5%.

“The say-on-pay changes CEO behaviour through two main mechanisms. First, by giving shareholders a channel to express their opinions, it intensifies board monitoring and pressure on the CEO to improve performance, especially as a negative vote could have consequences on the level of support the CEO receives within the firm. The prospect of a negative vote is also not one the CEO wants to face for the sake of his or her own career. The second is that the say-on-pay can affect the current level and structure of executive pay making it more closely tied with performance,” said Guadalupe.

Her study also finds that when shareholders in her sample put forward proposals to adopt say-on-pay, boards recommended a vote against it at shareholder meetings in 99% of cases. This, Guadalupe said, represents a misalignment of objectives between management and shareholders that mandatory say-on-pay votes can address.

“While the debate has moved on to whether to make say-on-pay votes binding, for which we have no evidence to support or dispute, it is clear that legislative intervention has addressed a market failure on two dimensions; first, aligning management closer to shareholders and second, giving all shareholders an equal voice,” she added.

Differing executions of talent management in Asia

Source: ECN.

Talent management has increasingly become a strategic priority for business leaders fighting for managerial talent across Asia. 

A survey of the Economist Corporate Network's (ECN's) 550 member companies across Asia has found that 95% of CEO respondents feel they are actively involved in talent management. However, the nature of their role and the extent of their involvement varies widely.

Aligned for Success? Strategy, talent management and the role of the CEO in Asia reveals that the involvement of CEOs in human capital issues centres most heavily on strategic and planning activities, such as assessing the future shape of their workforce needs, and organisational design. Many CEOs admit to doing less about the developmental aspects of talent management such as nurturing key skills, training programmes and mentoring future leaders.

Highlights from the report include:

· A high proportion (90%) of respondents are raising their investment in internal talent development, but 65% indicate that they have no clear metrics in place to measure the benefit gained from training programmes.

· CEOs identify leadership, strategic thinking and an ability to manage across cultures as the top three skills missing among their current management bench.

· While nearly all CEOs claim to be the leading voice for, and closely involved with, talent management, most currently devote less than 20% of their time to talent-related issues. At the same time, 43% feel they should be giving more time to developing talent in their companies.

· CEOs are most closely involved with the planning aspect of talent management with fewer than half closely involved in actually developing talent.

· Asia-based CEOs indicate that their HR heads are more closely involved in strategy development than their counterparts in Europe and North America.

· 89% of respondents claim that their talent management strategy is informed by and aligned with their core business strategy.

Justin Wood, Director of the Economist Corporate Network in South-east Asia, said: “Competition for talent is intensifying in many parts of Asia. In Southeast Asia, for example, the value of foreign direct investment inflows reached record levels in 2013, overtaking China. These foreign firms are all looking for management talent to drive their investments. At the same time, local firms in Southeast Asia are also growing quickly and investing internationally, both across the ASEAN region, as well as further afield. This makes the battle for top talent especially intense.

“CEOs regularly claim that people are the number one priority at their firms. Yet all too often a gap exists between their rhetoric and the reality. This is usually because of a disconnect between the CEO’s strategic vision and the implementation by HR leads. This new report reveals how business leaders in the region are now looking to bridge this gap by adopting a more strategic approach to talent management, aligned with their core business strategies.”

Read the Southeast Asian edition of the report here. 

*To explore the challenges of securing and developing the right people with the right capabilities, skills and mindset for business leaders in Asia, the ECN surveyed CEO clients about their role in talent management and the extent to which talent management is aligned with core business strategy. Findings of the regional survey were discussed with CEO-level focus groups in Tokyo, Shanghai, Hong Kong and Singapore and these insights were used to help inform the final report.