Since 2021, we’ve marked the start of each year by exploring the top five issues for private and family businesses to address in the coming year. While the focus areas change and evolve each time, several themes remain consistent namely technology, people and sustainability.
In our 2023 article, one of our key recommendations was for private businesses to “act short term, think long term.” It’s a theme that continues and is strongly underlined by PwC’s 27th Global CEO Survey, published at the World Economic Forum in Davos.
Of PwC’s 27th annual CEO survey of 4,702 CEO respondents in 105 countries, 68% lead privately owned companies as opposed to publicly-listed companies. This is important as it both demonstrates that private businesses are drivers of economic activity, employment and growth and also offers a great opportunity to compare how private and listed companies respond to the same questions.
What do private company CEOs think about today’s challenges?
Firstly, private company CEOs are consistently more optimistic than their listed counterparts about their ability to ride out the enduring risks of macroeconomic volatility, inflation and political turbulence. In fact 50% think their business will still be viable in ten years’ time, against 35% of listed companies. This optimism mirrors the long-term perspective and positive outlook of private business leaders as they build their legacy.
When we turn to more immediate, shorter-term disruptions like cybersecurity and Generative AI (GenAI), we find private companies are more optimistic on these as well. For example only 60% of CEOs of privately owned businesses think GenAI will increase their cybersecurity risks in the coming year, compared to 78% of listed corporations. Yet when it comes to concrete actions like adopting GenAI, private businesses are lagging way behind with only 27% saying they’ve done this in the past year, compared to 43% of listed companies.
Well-founded confidence or blind spot?
Taken together, these findings raise some searching questions. Is private businesses’ optimism over short-term (as well as long-term) challenges justified? Or does it reflect a blind spot they lack the resources and skills to tackle?
There’s also a wider concern here. As our latest Global Family Business Survey points out, private companies have been losing their traditional “trust premium” because they’re being slow to act on ESG in general, and climate change in particular. Our CEO Survey confirms this gap still exists: only 70% of private businesses report progress on improving energy efficiency, against 87% of listed corporations. Also, in the years before the current gap on climate action opened up, private businesses were lagging behind on digital transformation, until the COVID-19 pandemic increased the speed of adoption.
The five focus areas for 2024
Against this background, we’ve mapped out our five priorities for private business in 2024.
Private businesses have many inherent strengths that – if applied well – can position them in the forefront of their industries while also benefiting the societies where they operate. As 2024 unfolds, there’s a great opportunity to leverage those strengths to maximum effect. We think the five priorities we’ve highlighted can help. Get in touch if you’d like to discuss any of these issues further.
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