Irish CEOs are in a stronger position than their counterparts internationally, with a third believing they are better off now than prior to the pandemic, according to the EY 2022 CEO Outlook Survey.
Over a third (37%) of the 30 responding Irish CEOs said their businesses have been reshaped positively by the pandemic, compared to just 13% globally, suggesting that Irish businesses have adapted more quickly to changing circumstances and are more ready to capitalise on growth opportunities.
Almost half of CEOs (47%) plan to invest more heavily in their core business over the next five years versus 41% internationally. Digital transformation and technological change was cited among the top opportunities driving organisational changes, with 20% of Irish respondents viewing it as the number one driver.
More than half of the Irish CEO (56%) expect their company will pursue acquisitions in the next year, with 52% indicating that they will seek to capture assets that either increase their operational capabilities or make bolt-on acquisitions that grow their market share.
Despite a record number of mergers and acquisitions last year, 97% of Irish CEOs said they either failed to complete or cancelled a planned deal in the last 12 months, primarily due to the impact of the pandemic of regulatory bottlenecks.
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Some 42% of Irish CEOs plan to avoid M&A and reshape their businesses through organic investment though, and 94% plan to reconfigure their supply chains to manage geopolitical risks, although 73% are reconsidering cross-border investments due to heightened tensions.
"Following two years of intense disruption to both life and business globally, current geopolitical disruption has reverberated across global markets resulting in escalating energy prices, shortages of key commodities, and massive supply chain disruptions," Graham Reid, EY Ireland partner and head of markets, said.
“Even though our survey was conducted at the end of 2021, the results remain valuable as they reveal a future-facing mindset among CEOs of leading Irish organisations who are looking beyond short-term pressures to invest in long-term value creation. They are reframing their investment strategy for growth in an ever-changing business landscape."
Environmental, social and governance (ESG) criteria will also have a greater influence on M&A and investment strategies for Irish companies, with all respondents confirming sustainability factors are driving their M&A agenda in some form, particularly when it comes to reducing the risks of ESG-related regulatory costs.
ESG is the primary driver of sustainability strategy, but 37% of respondents said they were mostly driven by pressure from governments, regulators, and society, while 83% have experienced resistance to some ESG measures.
Of these respondents, 40% said their investors and shareholders would prefer to wait until they see competitor strategies in their sector before moving ahead, while 52% said they had pushback from either a minority or majority of investors who are not yet convinced about the cost and potential benefits of their ESG agenda.
While 22% of the Irish respondents said improving the environmental impact of their companies’ activities was one of the top objectives; a further 18% said they were fulfilling these goals by improving diversity and inclusion in their companies.
"The pandemic has brought about very recognisable changes that are here to stay in the medium to longer term, in particular with regard to the way many of us interact or communicate with clients, to how we shop online, or how we ensure a better work-life balance for our workforce," Reid said.
"Companies need to react proactively to these developments to maintain and gain market share. Post pandemic our world is facing many other challenges such as rising geopolitical tensions and climate change and corporates need to react decisively to these developments to remain at the forefront of their respective industries.”
More than 2,000 CEOs in 53 countries across 14 sectors were asked about their views on critical, strategic issues for the survey between November and December 2021.
(Pic: Getty Images)
