CEOs of publicly listed companies more concerned about cybersecurity
The majority of CEOs at private companies continue to look to organic growth as a means to drive corporate growth and profitability in the coming 12 months. Concern among private CEOs around technology and cybersecurity remains below that of publicly listed companies, creating a potential gap in wider cybersecurity defences.
The global business environment is in a period of transition as geopolitical uncertainty on a global scale, technological change and environmental concerns affect businesses across a range of sectors. In a new report from PwC, the professional services firm explores the differences between the outlook of CEOs running private companies and those in public companies The report is based on the firm’s larger ‘20th CEO Survey’ Study, and is titled ‘Undaunted, but underprepared?’.
The firm’s survey found that in the coming 12 months, private companies are slightly less likely than public companies to leverage organic growth to drive corporate growth or profitability, at around 78% to 82%. Private companies also said that they are ever so slightly less likely to use new strategic alliances or joint venturing.
Private companies were however, around 4% less likely to use outsourcing in the comping 12 months to drive growth, and around 6% less likely to engage in M&A at 38% of respondents. Cost reduction was also less often on the agenda at private companies, although 58% still said that they would engage in the practice. Few respondents, around 12%, said that they would sell a business or exit a market.
While geopolitical trends, from the new US administration and changing conditions in China to the effects of Brexit and scandals across emerging economies affect companies globally, technology is too becoming an increasingly prominent issue, creating incremental and disruptive risks to companies.
In terms of the differences between how private and publicly held companies view the risks, different profiles emerge. The survey found that 74% of public companies are concerned about the speed of technological change, while around 65% say that cyber threats are a concern. For private companies, 68% of respondents say that they are concerned about the pace of technological change while 59% say that they have concerns around cyber security. In terms of how concerned companies are in the different spheres, the research notes that 22% of private companies are extremely concerned while 26% of public companies are extremely concerned.
According to Stephanie Hyde, the Global Entrepreneurial & Private Business Leader at the UK arm of the consulting firm, “The fact that private company CEOs are less concerned about technology and cyber compared to their public counterparts is worrying, not least because private companies often have fewer resources available to them to invest in new technology and cyber security. This may make them more vulnerable to cyberattacks, so in theory they should be more concerned about these threats, not less. In our view, this is probably the single most worrying finding in our report, especially in light of growing evidence that hackers are now targeting smaller and private businesses, thinking they will not be so well protected.”
The study also lighted on differences between public and private companies in terms of their strategic priorities going into 2017. Public companies are slightly more focused on innovation, at 24% versus 22% for private companies. Public companies are also slightly more concerned about digital technological capabilities, at 16% versus 13%. Human capital considerations slightly favour private company interests, at 16% versus 13%. In terms of private companies, differences are further noted based on type – with considerably lower emphasis on technology at family-owned (8%) and owner-managed firms (9%).
CEOs at publicly listed companies, and those across private companies, too slightly different concerns when it comes to the availability of key skills. 33% of privately owned company respondents say that they are extremely concerned about the availability of skills, compared to 29% of those at publicly listed companies. Interestingly, private company CEOs are also the least concerned about the availability of skills, at 20%, compared to 26% for publicly listed companies.
In terms of the skills that CEOs at private company note as hard to acquire, problem solving comes in at number one at 79% of respondents, followed by leadership at 72% of respondents. Adaptability, creativity and innovation too score highly in terms of difficulty to acquire, at 63% and 60% respectively. The report notes that ‘digital’ skills are not of concern to the vast majority of respondents, cited by 30% as a problem to attract.
