Around the world, the search for answers to complex issues has given rise to a new model of corporate leadership. But the question around what it takes to truly lead, particularly for CEOs, is still hotly debated. We know that courage, vision and resources are all merely entry stakes. So what is it that sets successful CEOs apart?
The most resounding fact we uncovered in our latest research into what we term “the CEO imperatives” is very clear: CEOs are no longer just stewards of their own businesses. Not only is this no longer the expectation of employees and communities, it’s also increasingly becoming what investors and board directors are demanding of CEOs.
The rise of the socially conscious CEO
CEOs are developing into global leaders with the influence to tackle the world’s most complex challenges. They have realized that to be successful, they cannot ignore pressing social issues in the places they do business. They are key players in the wider ecosystem and as such have a voice, and even a responsibility, to act.
I am personally thrilled to see this change. In my work spanning more than two decades, I have worked to find ways to support organizations and CEOs on their transformative journeys. And, we are now at a critical – and promising – juncture where businesses, governments, customers and other stakeholders understand the urgency of our time and the need to forge a collective response to many of the world’s challenges.
Here in the part of the world that I live in and lead for EY, we’ve found that more than 90% of investors and directors in Europe, Middle East and Africa (EMEA) believe CEOs should take a stand on issues. That’s substantially higher than their counterparts in the Americas and Asia-Pacific (which respectively come in just over and under 70%). CEOs in EMEA clearly see this as part of their role, as they are also more likely than their peers in other regions to favor corporate activism. Encouragingly, investors in EMEA are more supportive of CEOs who focus on long-term investment.
But no matter which geographic area, CEOs around the world agree on their biggest challenges: cyber-risk, job losses due to technology, income inequality, the ethics of AI and climate change. Each of these challenges could seriously derail global growth.
Investors in EMEA lead the world in long-term thinking
CEOs are also heeding calls for more inclusive growth, and it’s heartening to see that the outlook of institutional investors has also shifted dramatically in this direction. In fact, 73% of investors in EMEA support long-term investments that could improve long-term business prospects even if they diminish near-term financial performance. This tops the investors in the Americas at 57%, and those in Asia-Pacific at 56%. This trend appears here to stay, as more than 80% of investors in EMEA expect that a company’s stance and actions on global challenges will become an increasingly important investment consideration over the next five years.
As long-term orientation becomes more prevalent, companies will be searching for verifiable ways to measure long-term value. As part of the EY commitment to inclusive growth, we helped create the Long-Term Value Framework, along with the Coalition for Inclusive Capitalism and more than 30 companies representing more than $30 trillion in assets under management. This framework is aimed at creating a consistent set of agreed-upon outcome metrics that can provide a reliable indication of long-term value creation.
Around the world, the search for answers to complex issues has given rise to a new model of corporate leadership. But the question around what it takes to truly lead, particularly for CEOs, is still hotly debated. We know that courage, vision and resources are all merely entry stakes. So what is it that sets successful CEOs apart?
The most resounding fact we uncovered in our latest research into what we term “the CEO imperatives” is very clear: CEOs are no longer just stewards of their own businesses. Not only is this no longer the expectation of employees and communities, it’s also increasingly becoming what investors and board directors are demanding of CEOs.
The rise of the socially conscious CEO
CEOs are developing into global leaders with the influence to tackle the world’s most complex challenges. They have realized that to be successful, they cannot ignore pressing social issues in the places they do business. They are key players in the wider ecosystem and as such have a voice, and even a responsibility, to act.
I am personally thrilled to see this change. In my work spanning more than two decades, I have worked to find ways to support organizations and CEOs on their transformative journeys. And, we are now at a critical – and promising – juncture where businesses, governments, customers and other stakeholders understand the urgency of our time and the need to forge a collective response to many of the world’s challenges.
Here in the part of the world that I live in and lead for EY, we’ve found that more than 90% of investors and directors in Europe, Middle East and Africa (EMEA) believe CEOs should take a stand on issues. That’s substantially higher than their counterparts in the Americas and Asia-Pacific (which respectively come in just over and under 70%). CEOs in EMEA clearly see this as part of their role, as they are also more likely than their peers in other regions to favor corporate activism. Encouragingly, investors in EMEA are more supportive of CEOs who focus on long-term investment.
But no matter which geographic area, CEOs around the world agree on their biggest challenges: cyber-risk, job losses due to technology, income inequality, the ethics of AI and climate change. Each of these challenges could seriously derail global growth.
Investors in EMEA lead the world in long-term thinking
CEOs are also heeding calls for more inclusive growth, and it’s heartening to see that the outlook of institutional investors has also shifted dramatically in this direction. In fact, 73% of investors in EMEA support long-term investments that could improve long-term business prospects even if they diminish near-term financial performance. This tops the investors in the Americas at 57%, and those in Asia-Pacific at 56%. This trend appears here to stay, as more than 80% of investors in EMEA expect that a company’s stance and actions on global challenges will become an increasingly important investment consideration over the next five years.
As long-term orientation becomes more prevalent, companies will be searching for verifiable ways to measure long-term value. As part of the EY commitment to inclusive growth, we helped create the Long-Term Value Framework, along with the Coalition for Inclusive Capitalism and more than 30 companies representing more than $30 trillion in assets under management. This framework is aimed at creating a consistent set of agreed-upon outcome metrics that can provide a reliable indication of long-term value creation.
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