- Businesses say transformations in technology (68%) and sustainability strategies (62%) are most likely to happen.
- ESG is firmly on the C-suite agenda: three quarters plan to boost investment in sustainability initiatives and most have made public commitments on a range of ESG topics.
- But research at a global level suggests a gap between intent and action.
- 96% of Romanian businesses are expecting transformation in new services/markets, while 92% are looking forward to technology transformation.
- 74% of C-suites in Romania are currently focusing on each ESG factor.
Mazars, the international audit, tax, and advisory firm, today releases its 2021 C-suite barometer: Time for action. This report is the result of an in-depth survey conducted in Q4 2021, which took the pulse of over 1,000 executives from 39 countries around the world.
Mark Kennedy, Partner and member of the Group Executive Board at Mazars says: „We conduct our annual barometer to hear, and understand, the opportunities and challenges our clients are facing. One of the most notable findings of the study was the sense of confidence and resilience we uncovered: with the ongoing impact of the pandemic, rising inflation, and the horrifying attack on Ukraine, these are qualities that are likely to be tested once again this year.”
Tech and sustainability transformations ahead
Our research shows that leaders expect to transform their businesses, with technology and sustainability-related transformations being the most likely: nearly two-thirds (62%) expect to transform their sustainability strategy in the coming years, second only to technology transformation (68%).
A sense of confidence and resilience
Businesses are confident they can respond to the trends ahead: 94% are confident they can respond to trends in technology/innovation; 91% are confident in responding to expectations for governance, ethics, and social responsibility; and 90% are confident in responding to new or higher regulatory requirements. And most (88%) believe they have the resilience to weather a crisis. In the face of increasing cyber risks, most (68%) are confident their data is completely protected.
ESG on the C-suite agenda: time to turn intent into actionable strategies
Businesses expect to transform their sustainability strategies, boost investment in sustainability initiatives and are making public commitments on a range of ESG topics. Clearly, ESG is in focus for C-suite.
Chris Fuggle, Co-Head of Sustainability at Mazars comments: „The big challenge is to turn intentions and commitments into achievable strategies. It is critical to build an understanding of ESG at the highest level, embed it in the core business strategy, and have a plan that you follow through on a daily basis. This isn’t a quick fix, but the important thing is starting the journey.”
From strategy to action
Considering the expected transformations, confidence to respond to trends, investments planned, and commitments made on ESG, there appears to be a gap between intent and action.
Having the programmes in place and the right leaders with the right skills will be crucial. Our survey identified the three most important skills leaders will need in the coming three to five years as: strategic vision and planning; analytical thinking and problem-solving; innovation and creativity. With the focus on ESG and high confidence to respond to expectations for governance, ethics, and social responsibility, it’s perhaps surprising that ‘sense of purpose for the organisation’s future’, ‘strong ethics to drive and lead responsibly’ and ‘emotional intelligence’ are lower down the list.
Kennedy comments: „Competition for talent is fierce, particularly with the rise of ESG and people’s expectations of how businesses should behave. Organisations that can demonstrate their values and their vision, and who can develop, recruit and empower their people with the right skills, have the opportunity to build competitive advantage.”
Our research shows businesses feel prepared and confident to respond to the trends and transformations ahead. But to deliver on their promises they need to focus on investments and ensure their strategies are achievable.
Romanian C-suite leaders, more optimistic about the future of their businesses
Although the Romanian leaders expected no change to their 2021 revenue vs. 2020, with only 38% of them predicting growth, compared to 86% globally, in 2022 local businesses are more positive and 81% expect now higher revenues compared to last year. Following this positive note, they are also planning more investments, with 86% of C-suite leaders saying that they will increase resourcing for each business activity (vs. an average of 72% globally).
- Transformation is at the core of business growth
When asked „How likely is it that your organisation will go through a transformation during the next 3-5 years?”, Romanian leaders chose the transformation in new services/markets (96%) as a top priority (vs. ranked fourth globally), followed closely by the one in technology (92%), and in performance improvement (90%). Globally, number one is taken by technology and sustainability-related transformations.
Regarding the COVID-19 pandemic, the main changes Romanian C-suite executives mentioned were employee engagement (48%) and adapting to remote work (42%). Since 2020, the COVID-19 pandemic radically shifted not only the way we work, but also the way we connect at work. The past year has highlighted the need to focus on employee engagement for remote teams, something that leaders must continue to prioritise even as many businesses are reopening their offices.
Another high priority for businesses both locally and globally is represented by IT security. More than half of the Romanian respondents (54%) said that IT security enhancement will be the main long-term change due to the pandemic. Also, as we have found in our recent data maturity study, businesses see big data as their most important source of growth for the next 10 years, but as their reliance on tech and data increases, so are the risks around cyber security. Romanian executives are very pessimistic about their data protection: only 31% feel their data is “completely” protected, vs. 68% globally. Two-thirds feel that they’re likely to have a data breach next year vs. roughly one-third globally.
- ESG is here to stay
ESG (environmental, social, and governance) factors represent critical challenges for both boards and executive teams. In Romania, more than half of C-suite leaders (52%) mentioned that employee expectations are the top driver to invest in ESG, while at the global level, brand/reputation tops the list of reasons, closely followed by client/customer expectations.
There has clearly been a shift in attitudes regarding ESG, with employees who want the company they work for to take a strong position on social issues. We must also take into consideration that Romanian Millenials and Gen Z are much more favorable toward sustainable businesses than Baby boomers.
74% of the Romanian C-suite leaders are currently focusing on each factor of the ESG matrix vs. 45% globally. Although the ESG factors have become particularly salient since the COVID-19 context, only 29% of Romanian executives have said that the pandemic has increased their focus on ESG, compared with 59% at the global level. On the other hand, climate risk is expected to have the biggest impact according to 58% of the Romanian executives, compared with 27% around the world.
„The scarce labour and the emigration of our talent, have had a strong impact on leaders’ focus on people. The Romanian leaders wish to concentrate on all areas of ESG, but the question is how will they establish the main priorities. I think this is the best time for Romania to turn a challenge into an opportunity, eventually by proving the openness towards an effective collaboration to meet the targets. Catching up and closing the gap between this country and the rest of Europe will incumbent smart choices and determination to get the most important done.”, mentioned Dino Ebneter, Country Managing Partner, Mazars Romania (photo).
- Leading people to the next normal
Considering the social areas of focus within ESG, globally, health & safety is the top priority, while in Romania, 83% of the executives are focusing on both health & safety and human rights.
When asked about diversity and inclusion (D&I) initiatives, leaders are putting employees front and center. Using inclusive language and mental health are the top D&I areas of focus for Romanian leaders, with the latest being a priority also at a global level. The most common D&I programme reported by local businesses is dedicated to people with disabilities (65%), while globally is social inclusion (50%).
When talking about leadership skills, it’s the human element that makes the difference in Romania, with 44% of leaders selecting caring and emotional intelligence as the top leadership skills.
We believe that to undergo a sustainable transformation, C-suite executives need to value qualities such as a sense of purpose, emotional intelligence, strong ethics, and drive to lead responsibly and inclusively. Furthermore, to attract and retain the right talent, we will be needed an open mind approach, that can help us progress as individuals, and as a society.
About the study
The Mazars C-suite barometer was designed and conducted by GQR Research, in collaboration with Mazars. The data was gathered via an online survey between 24 September 2021 and 25 October 2021. The total sample is N=1,130, with 1,096 sourced from online panels and 34 invited via email directly from Mazars.