CEOs See ‘No End in Sight’ To Current Cybersecurity Challenges

More CEOs say the war in Ukraine has affected their companies’ cybersecurity than anything else, and a whopping 85 percent of them see it as a prolonged challenge, “with no end in sight.”

Ongoing war in the Ukraine has begun to not only dampen CEOs’ forecasts for the future but is also causing challenges in their present ability to do business. Inflation, cybersecurity and supply chains were already issues before the war, but now, CEOs are concerned about how bad things may get—and for how long—before they improve. Especially when it comes to cyber challenges, of which 85 percent of CEOs say they see ‘no end in sight’. Directors share the same concerns and show it in Corporate Board Member’s Director Confidence Index rating, which hit a record low in March.

In a poll of 207 U.S. CEOs, presidents and chairs, surveyed April 5-7, as part of our CEO Confidence Index, 43 percent of CEOs said that Russia’s invasion of the Ukraine has heightened cybersecurity concerns—and 41 percent also expect significant consequences on their supply chain. Due to their growing challenges with cyber and supply, CEOs’ confidence in the future conditions of business has dropped to its lowest point since the fall of 2016. And board members agree. In a poll of 143 U.S. public company directors, conducted March 21-25 by our sister publication, Corporate Board Member, an even higher percentage of directors said that their business’ cybersecurity has been impacted by the war, at 56 percent—and 39 percent of directors also noted consequences in the supply chain.

A smaller proportion of directors said that their business was unaffected by the war in Ukraine, at 17 percent, compared to 22 percent of CEOs. Overall, a higher proportion of directors said that all aspects of their business are impacted by the war. There are only two aspects where more CEOs said they face challenges: pricing strategy and supply chain.

“Competition between authoritarian and democratic systems are intensifying.  I believe that supply chains will become more regional, and security will become more important than the lowest possible price,” says the CEO of an upper-mid size medical product company.

And although a smaller percentage of CEOs have experienced heightened troubles with cybersecurity, more expect the challenges to be long-lasting. A whopping 85 percent of CEOs see ‘no end in sight’ to cybersecurity troubles, compared to 75 percent of directors who say the same.

Seven in 10 directors said they see ‘no end in sight’ to the race for talent. This proportion is far above the 42 percent of CEOs who said the same. Instead, a third of CEOs expect talent troubles to remain an issue for business for another 1-2 years—only 14 percent of directors agree.

Aside from cybersecurity and talent, two aspects of business that a plurality of CEOs believe will remain an issue with no end in sight are reputation/social perceptions of businesses (38%) and employee safety/wellbeing (34%). These two aspects of business are also where the highest proportions of CEOs expect resolutions within 3 months at 31 and 20 percent, respectively.

CEOs and directors are mostly aligned on their opinions of whether to stop, pause or continue operating in Russia. 49 percent of CEOs personally believe that companies should at least pause their operations in Russia, compared to 45 percent of directors. Fewer CEOs believe than companies should pull out of Russia entirely compared to board members, at 32 and 39 percent, respectively.

One CEO of wholesale/distribution company says that when it comes to pulling out of Russia, “it depends on what services or products you are providing. The people of Russia did not cause this war. Having every company pull out of Russia is very dangerous. The other question on social justice is how it is executed? While no one condones what Russia is doing, the rhetorical question should the companies pulling out of Russia be doing business in China?”

Similar proportions also believe that companies should be bound by law and follow what is laid out by government, at 10 percent of CEOs and 7 percent of directors. The biggest difference lies in the proportion of CEOs vs directors who believe that companies should be able to continue operating in Russia without facing backlash or pressure: 6 percent of CEOs hold that belief vs only 1 percent of directors.

Fed Policy

The Fed’s quarter-point interest rate hike didn’t disappoint most business leaders in the U.S., with 56 percent of CEOs in full support of the decision. The vast majority of directors support the rate increase as well, at a whopping 63 percent.

The same proportion of both directors and CEOs—28 percent—believe that the interest rate hike needed to be higher to accomplish anything.  

“Fed should have been raising in 2018-2019.  Increase is too late and too small to quell inflation.  When real rates are negative or below inflation rate, Fed is still too loose,” says Mike Moakley, President at Battle Creek Harley-Davidson.

Twelve percent of CEOs have the opposing opinion—that the increase should have been less than 0.25%—a far greater proportion than the 1 percent of directors who believe the same.

About the CEO Confidence Index

The CEO Confidence Index is America’s largest monthly survey of chief executives. Each month, Chief Executive surveys CEOs across America, at organizations of all types and sizes, to compile our CEO Confidence Index data. The Index tracks confidence in current and future business environments, based on CEOs’ observations of various economic and business components. For additional information about the Index and prior months data, visit ChiefExecutive.net/category/CEO-Confidence-Index/

 


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