Cyber attacks are the biggest threat to UK business in the eyes of both investors and CEOs, with 43 per cent and 39 per cent respectively extremely concerned about the potential impact they can have, according to a new study by PwC.
The latest annual Investor Survey compares the views of those who invest in or analyse businesses based in the UK with those of UK CEOs, and reveals notable differences between investor and CEO concerns. On the whole, UK investors are more worried about speed of technological change (36 per cent investors; 22 per cent CEOs) populism (38 per cent investors; 26 per cent CEOs) and protectionism (36 per cent investors; 26 per cent CEOs); while UK CEOs see over-regulation (37 per cent CEOs; 28 per cent investors) and finding the right skills (35 per cent CEOs; 18 per cent investors) as greater threats.
Hilary Eastman, head of global investor engagement at PwC, said: “The top concerns of investors and CEOs emphasise the contrast between internal and external perspectives on business. While on the ground challenges such as finding the right skills are high on business leaders’ agendas, investors are preoccupied with the impact that wider societal trends, such as populism and protectionism, have on businesses generally.”
Both UK investors and CEOs are optimistic about the outlook for the global economy for the next 12 months, with 52 per cent and 36 per cent respectively saying it will improve, up from 39 per cent and 17 per cent in 2017. However, global investor and CEO confidence is higher still, with 54 per cent and 57 per cent expecting an improvement in the global economy, up from 45 per cent and 29 per cent last year.
PwC finds investors have a more positive short-term outlook for the companies they invest than CEOs do about their own organisations, with 69 per cent of UK investors very confident about companies’ revenue prospects over the next 12 months compared to 34 per cent of business leaders. This is significantly higher than global investor confidence over the next year, with just 23 per cent very confident in the short term.
Over a longer period CEO optimism is higher, with only 17 per cent of UK investors very confident about the growth of the businesses they invest in over the next three years, compared to 40 per cent of UK CEOs who are very confident about their own company’s growth. Global investors and CEOs are slightly more optimistic over the longer term, with 20 per cent and 45 per cent respectively very confident about three year growth prospects.
Hilary Eastman added: “Investors expect disruption to have a bigger impact on business than CEOs, which might be affecting investor confidence in growth over the longer term. Effective communication between businesses and investors is key to addressing caution. If businesses can clearly demonstrate the actions they’re taking to combat investors’ concerns, they’re more likely to be able to attract long-term investment.”
Trust is another area where investors and CEOs have differing views. To build trust in the workforce, more than half of the UK investors polled believe transparency around compensation and benefits is crucial (57 per cent investors; 49 per cent CEOs), while the majority of CEOs feel the organisation’s values are most important (76 per cent CEOs; 54 per cent investors).
To improve trust with consumers, investors in the UK think businesses should prioritise investment in cybersecurity protection (66 per cent investors; 39 CEOs), while CEOs feel transparency about the organisation’s business strategy would be most effective (44 per cent CEOs; 41 per cent investors).
Hemione Hudson, head of assurance at PwC, commented: “Taking the investor perspective into account can give CEOs valuable external insights into where they need to focus to build confidence in their business. The survey findings suggest investors are more concerned about the risks associated with rapidly evolving technology than CEOs. Investing in cybersecurity, digital skills and training will be crucial for business leaders if they want investors to have confidence in their companies.”
Fears related to cybersecurity and regulation leads us to the issue of data protection, and as part of the compliance journey, the forthcoming GDPR.
GDPR Summit Series is a global series of GDPR events which will help businesses to prepare to meet the requirements of the GDPR ahead of May 2018 and beyond.
Further information and conference details are available at http://www.gdprsummit.london/