A cursory look at the results of PwC’s 27th Annual Global CEO Survey and 2023 Global Investor Survey might initially suggest a broad alignment between chief executives and investors when it comes to external threats to business. Respondents to both polls said they’re feeling less exposed to key risks—including inflation, macroeconomic volatility and geopolitical conflict—than they were a year ago. But when the responses to the most recent surveys are compared side by side, as they are above, a conspicuous gap emerges, with investors signalling greater concern—in some cases, much greater—than CEOs for all seven top-cited risks. In a further misalignment, investor concern about certain threats, like climate change and social inequality, has actually increased from a year earlier, whereas CEOs’ concern about those same threats has eased.
The gaps emphasise the need for better alignment between CEOs and investors on how threats are assessed, managed and mitigated. For executives, that means getting the fullest possible picture of the risk landscape, and communicating that picture to investors with improved transparency. They can start by focusing on three priorities:
- Get a 360-degree view. Aligning with investors on threat exposure—and boosting operational resilience—starts with panoramic, real-time risk intelligence. Integrated data analytics, such as AI-powered risk dashboards, and scenario-modelling technologies can be instrumental in obtaining that intel. So can regulatory frameworks like the Corporate Sustainability Reporting Directive (CSRD), which contains, for example, extensive disclosure requirements on climate risk and societal impact that can serve as a forcing function for conducting the kind of transparent assessments investors look for.
- Collaborate across silos. The threats cited in the CEO and investor surveys are increasingly complex and interrelated—geopolitical conflict, for example, can simultaneously spur inflation and worsen cyber threats—and require unprecedented C-suite collaboration. Threats can no longer be thought of as corresponding neatly to individual business units or geographies. Encourage candid communication both within management teams and among the C-suite, operational functions and internal audit teams. That kind of transparency will challenge assumptions and enable a full-value-chain view of risk exposure so that the most urgent vulnerabilities can be brought to the fore.
- Define your risk appetite. Risk intelligence and cross-silo collaboration should be put to the service of more than just mitigation. Those imperatives can be designed to help create a culture centred around a clearly articulated risk appetite, one that foregrounds opportunities and upsides. PwC’s 2023 Global Risk Survey of nearly 4,000 businesses singled out a subset of “risk pioneers” that are doing just that, by leveraging risk modelling and analytics, as well as upskilling initiatives, in particularly effective ways. Doing so has enabled these companies to see risk through the lens of value creation—and not just value protection.
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