Boardrooms continue to navigate an uncertain world. A volatile economic landscape, accelerating AI adoption and a sustained appetite for value creation through transactions are all shaping the C-suite agenda.
Insights from the 1,200 chief executives worldwide who contributed to EY’s ‘CEO Outlook Global Report’ highlight how leaders have moved beyond the hope of stability to actively designing resilience into their business models, while turning the uncertainty into a competitive advantage.
Despite mounting trade tensions and geopolitical headwinds, chief executives remain active. Nearly all (99%) are planning major acquisitions, divestments or joint ventures in the coming year, while most (98%) simultaneously express serious concern about rising trade barriers that could fundamentally reshape how they do business.
Three key themes are shaping their approach in turbulent conditions.
The world remains upside down: Navigating uncertainty and resilience
CEOs continue to lead through persistent economic and geopolitical volatility. While almost all (99%) CEOs surveyed express concern about rising trade barriers, half (50%) admit to being very or extremely concerned.
They are also working through more than tariffs. Nearly half (42%) say the nexus between geopolitical, macroeconomic and trade uncertainty is the top risk to achieving growth targets. This is double the number citing cybersecurity as their top risk concern.
Adapting to these conditions, half (54%) are delaying planned investments, almost half (44%) are reorganizing supply chains and over a third (39%) have moved some of their operations to other countries.
CEOs continue to lead through persistent economic and geopolitical volatility.
CEOs across all sectors are also sensitive to the realities of their businesses and their exposure to geopolitical currents. In the consumer products and manufacturing space, most (90%) have adapted to the geopolitical environment, while in power and utilities, which is much less flexible, the percentage is closer to two-thirds (70%).
As the structural aspects of geopolitics become apparent, some CEOs are embedding long-term changes in their business. Innovation to design out materials impacted by tariffs is becoming as common as domesticating supply chains, and one-fifth of leaders have exited a geographic market entirely.
Looking beyond the pressures of tariffs and the geopolitical landscape, inflation continues to be a concern among CEOs. Almost three-quarters (71%) admit inflation continues to be a challenge for their business.
Boards and CEOs appear to be balancing the costs of permanent shifts with changing rules of the game. This raises questions about the resilience of business strategies to external shocks, as well as whether to continue investment amid such volatility. Leaders will also begin to consider more broadly how to thrive in a high-tariff, high-risk trade environment.
Evidence of gains, but no one-size-fits-all approach
Meanwhile, CEOs are becoming increasingly confident about the potential of AI. This confidence is beginning to be supported by lived experience.
Across sectors, CEOs are more likely (44%) to accelerate AI efforts than scale them back. Capital-intensive industries are especially optimistic. The survey results suggest CEOs in capital-intensive industries, such as oil and gas or mining, are particularly likely to accelerate based on experience.
CEOs are becoming increasingly confident about the potential of AI.
Risks to acceleration are centered on regulatory and geopolitical risks. The retail, tech and mobility sectors are particularly cautious, likely due to cybersecurity concerns.
However, implementation strategies vary. Across the 14 sectors surveyed, CEOs are split almost equally on whether they lean toward independent decisions across business lines compared with a centralized framework. This choice does not appear linked to views on the success of AI.
The overall picture is that CEOs are engaged with their organizations to deliver an approach to AI that is contextual, rather than adherence to any kind of industry best practice.
Seizing opportunities: Inorganic momentum and strong value creation
Through uncertainty, CEOs intend to remain active in transactions. Almost all of those surveyed (99%) say they are planning acquisitions, divestments or joint ventures. Acquisition plans are more common (60%) than divestments.
Motivations for acquisition vary across sectors. In technology-led sectors, including telecommunications, financial services and media and entertainment, CEOs are more likely to acquire to expand and enhance businesses by accessing new markets or capabilities. In others – technology firms themselves, plus energy and life sciences – consolidation across value chains and to find scale are more common ambitions.
CEO assessments of value creation through transactions are more optimistic than previous quantitative research. Overall, CEOs see strong value creation from recent deals with more than half (55%) saying that value met or exceeded expectations, while almost a quarter (23%) saw some value, though below expectations. Only a small number of respondents (2%) thought that deals destroyed value.
The most successful CEOs are reshaping their businesses rather than simply reacting to change.
These survey findings indicate that boards and CEOs should anticipate their competitors will remain active acquirers despite external volatility. For some, this will mean a review of their deal-making processes, including business development, deal execution and post-merger integration for compatibility with high levels of competition and outside volatility.
Underpinning these three themes is the realization that leaders who wait for certainty risk being left behind. This survey gives a picture of CEOs who are moving ahead despite uncertainty, with bespoke approaches grounded in their business’ context and capabilities.
While geopolitical tensions and economic volatility continue to create headwinds, the most successful CEOs are reshaping their businesses rather than simply reacting to change. For executives, the opportunity is to turn uncertainty into a competitive advantage.
