As the global economic recovery gathers momentum, optimism among CEOs is increasing. The postrecession period challenged many companies, and their chief executives focused their attention on survival. But they are now switching into growth mode. This drive for growth is shaped by fundamental external forces that are transforming business and society.
The world in which we live and work is being redefined by five global trends: technological advances, demographic changes, global economic shifts, urbanization, and resource scarcity and climate change. These trends have far-reaching and often interrelated effects on society. For example, the migration of spending power to emerging markets, along with explosive population growth in some countries, will result in a billion people being better off than they are now. The same developments, however, could exacerbate unemployment, social unrest, and resource shortages.
The impact of these trends is radically changing society’s expectations of business. And the extent to which a business behaves in line with these expectations determines how trustworthy it is perceived to be. Trust is pivotal because it is the basis of every human relationship, every transaction, and every market. Trustworthiness is the foundation of a business’s “license to operate” in any region or industry.
All of this is causing chief executives to think strategically about international business ethics—specifically, how trustworthy their companies need to be. To generate that trust, CEOs are not just interested in growth for their enterprises. They want to attain “good growth”: real, inclusive, responsible, and lasting growth. And they want their companies to contribute to good growth in every country where they operate.
“Short-termism, despite how tempting it might be to certain industries, doesn’t work,” said Badr Jafar, managing director of the Crescent Group, an oil and gas producer based in the United Arab Emirates. “To stand a chance of ensuring prosperity for their companies, business leaders today have to think more broadly, beyond profits and the bottom line. They have to move toward triple-bottom-line thinking: how their business is affecting not just profits, but also the people (the social impact) and the planet.”
At PwC, we have found that one of the ways businesses can generate trust is by focusing on behaviors that reflect a socially centered corporate purpose. This is becoming a priority for an increasing number of CEOs. That is evidenced in the findings from PwC’s 17th Annual Global CEO Survey. Published in January 2014, the survey consolidates the views of more than 1,300 chief executives in 68 countries across a range of industries. We asked these top business leaders to share their views on the global economy, their opinions of the trends that are reshaping business, and their plans for their companies’ future.
PwC survey of CEOs shows them seeking to generate trust through “good growth.”
The problems that businesses have with trust today can be traced back a few decades. Lapses in corporate behavior since the 1980s have damaged the way people feel about business, to the point where it affects the choices customers make. A number of corporate leaders have been working to address this “trust gap.”
At one level, their efforts appear to be bearing fruit. The CEO survey found that more chief executives believe trust levels have improved during the last five years, at least within their own industry, than believe they have deteriorated. These perceptions are borne out by public opinion. Findings from the 2014 Edelman Trust Barometer, a survey of the general public in 27 countries conducted by the public relations firm, also show a steady rise in trust. Fifty-eight percent of respondents expressed their trust in business, compared with 50 percent in 2009.