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The Actuary The magazine of the Institute & Faculty of Actuaries

Almost a third of CEOs believe they will experience at least one crisis in next three years

Exchange rate volatility and geopolitical upheaval has led to 30% of business chiefs believing they will experience at least one crisis before 2020, according to PricewaterhouseCoopers’ (PwC) CEO Pulse Survey.

CEOs expect to deal with crises on a regular basis ©iStock
CEOs expect to deal with crises on a regular basis ©iStock

Defined as one or more events that significantly impact or threaten the continuity of ‘business as usual’, the survey reveals that 50% of CEOs have experienced two or more crises in the last three years.

It was also found that 72% see global uncertainty as the biggest threat they face, with almost two-thirds of bosses feeling vulnerable about their ability to gather accurate information quickly in the event of a crisis.

PwC global crisis centre leader, Melanie Butler, said: “Often a crisis isn’t isolated and contained, nor is it fleeting. Some crises are anticipated, some unlikely and some are simply impossible to foresee.

“Our findings suggest that crisis management is very much on the CEO agenda because they are already dealing with crises – and believe they will continue to deal with them on a regular basis.

“It’s clear that for the foreseeable future the only certainty is uncertainty with continued geo-political turmoil, sluggish global growth and fluctuating currencies.”

The survey involved questioning 164 global CEOs about their views, struggles and approaches to crises, with 91% saying that they were in charge should such an event strike.

However it was found that 57% feel that they might be at risk due to an out-of-date business continuity plan, with 25% of respondents saying they had neither started a crisis response plan or currently intend to.

“The certainty that so many CEOs say they are in charge during a crisis is a key element of strong leadership. And it needs to be supported by a strategy, a clear plan, and a structure to first tackle then recover from the crisis,” Butler continued.

“If the rest of the business is unclear how they should perform at a time of serious uncertainty then the CEO can quickly find themselves isolated, undermined and exposed.

“Crisis planning is critical to help organisations prepare for, recover from, and respond to crises and having a battle-tested crisis plan that is aligned to the organisation’s purpose and value is key.”

The findings from the PwC survey also show that having a plan can allow businesses turn a crisis into an advantage, with 39% of CEOs saying that their ability to manage previous disruptions has contributed to revenue growth.