CEOs Show Scepticism Over Globalisation Benefits
Tuesday, 17th January 2017 at 1:44 pm
Business leaders are showing skepticism about the touted benefits of globalisation, including climate change mitigation and closing the gap between rich and poor, but at a slower rate than public perception.
PwC’s 20th global survey, which includes interviews with 1,379 CEOs from 79 countries, found perceptions of globalisation were gradually changing.
For the past two decades CEOs have been largely positive about the contribution of globalisation to the free movement of capital, goods and people.
And while most business leaders are “still ambivalent” about the negative impacts on society, 44 per cent of this year’s respondents said globalisation has not helped to close the gap between rich and poor.
Their views are moving closer in line with public perception, but PwC Global chairman Bob Moritz said CEOs still had a long way to go in understanding and implementing strategies for “inclusive growth”.
“Public discontent has the potential to erode trust which is needed for long-term, sustainable performance,” Moritz said.
“The real challenge here though, isn’t just one of how CEOs navigate, it’s about the need for CEOs to have a deeper, two-way relationship with stakeholders, customers, employees, and the public.
“Understanding the root cause of the potential discontent or perception is a critical first step towards communicating the benefits of business for society. There’s a lot at stake if we do not achieve inclusive global growth.”
In a separate PwC consumer poll of more than 5,000 people in 22 countries, only 38 per cent of the public said globalisation had a largely positive impact on improving the movement of capital, people, goods and information, compared with 60 per cent of CEOs
Almost two-thirds, 64 per cent, of the public believed globalisation has helped create full and meaningful employment, compared to over three-quarters, 76 per cent, of CEOs.
And only 29 per cent of the public think globalisation has created, to a large extent, a skilled and educated workforce, compared to 37 per cent of CEOs.
On a more positive note, however, CEOs said they were more willing to listen to and work with the concerns of the public.
The survey report, released Tuesday local time at the World Economic Forum in Davos, found “making globalisation work for everyone”, by engaging with society and collaborating to find solutions, would be one of the top-three concerns for CEOs in 2017.
Helene von Roeder, CEO of financial services firm Credit Suisse in Germany, Austria and Central Eastern Europe, said stakeholder relationships should be a priority for businesses.
“If you ask me how business can address these challenges [of globalisation], I do believe that the German system of a stakeholder, rather than a shareholder, economy is a pretty good answer,” von Roeder said.
The majority of CEOs also said the best way for business to spread the benefits of globalisation was to have more and better collaboration with government.
Beyond 2017, the report said safeguarding the future from the dangers of globalisation would be a “delicate balancing act” for CEOs.
“Many CEOs freely admit that they struggle with this, both because they’re uncertain about the extent of their company’s social obligations and because greater emphasis on shareholder value has made it far more difficult to prioritise long- over short-term performance,” the report said.
“But the events of the past year have shown us just how interconnected the interests of shareholders and other stakeholders really are. Businesses that ignore the power of the people will jeopardise the growth they seek.
“Conversely, businesses that respond effectively – by articulating their purpose, anticipating risks and adhering to the values they profess – will thrive.
“In the headlong rush to reap the benefits of technology and globalisation, the human factor has been lost. It’s time for CEOs to step forward and help safeguard the future by ensuring the benefits of business go to everyone.”