New year, new concerns.
According to the Wall Street Journal, 2020 has CEOs grappling with a novel concern: fear of an impending recession.
Fox Business supports this claim with an article whose headline shouts “Potential recession rises to No. 1 concern for CEOs in 2020.”
"In 2019, recession risk in the United States was ranked as the third biggest challenge, after cybersecurity and the threat of new competitors," Conference Board Chief Economist Bart van Ark told FOX Business. "The higher 2020 ranking of recession risk reflects more widespread concerns about the global slowdown as it evolved during 2019."
While 2019 saw cybersecurity dominating CEO concerns, investments in this domain and growing organizational confidence in security measures has placed the concern lower on their priority list.
CFOs are also contending with longstanding and familiar concerns.
According to the Wall Street Journal, additional c-suite concerns include:
Geopolitical uncertainty The geopolitical climate has a major effect on financial executives’ expectations and confidence. CFOs will be watching trade conflicts, Brexit and monitoring a potential global slowdown.
The trade war with China is part of the reason 56% of CFOs at U.S. companies said they are preparing for a recession, according to a survey conducted by Duke University’s Fuqua School of Business.
The hunt for talent
CNBC reports that CFOs face two major issues when it comes to hiring talent: availability of talent in a tight labor market, as well as identifying finance professionals to perform roles that increasingly require technological savvy.
Accountants and other finance professionals increasingly need to be able to check whether algorithms are functioning correctly, evaluate potential weaknesses of results, and communicate them in the context of the business.
"Very few CFOs we speak with feel their staff is adequately prepared to fulfill the finance mandate of driving growth through data analytics and digital transformation,” said Jeff Glenzer, executive vice president and chief operating officer at the Association for Financial Professionals, a Bethesda, Md.-based professional organization.
Staying on top of the books
CFOs could face several new accounting standards and regulations in 2020.
The Financial Accounting Standards Board, which sets U.S. accounting standards, is focusing on the issues of differentiating liabilities from equity and improving the measurement of goodwill for at least the first half of next year.
Many U.S. companies will have at least the next year to prepare for other accounting changes, due to delays of standards on lease accounting, hedge accounting, current expected credit losses and long-term insurance contracts.
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Global forces shaping the business landscape
The C-suite always deals with risk, some old some new. While a global recession may be CEOs’ top concern in 2020, it’s vital to take into account the general landscape in which change is occurring.
According to KPMG, the top 10 big issues facing business leaders in 2020 are:
1. Digital transformation
2. Global political and economic environment
3. Regulation and regulatory environment
4. Innovation and disruption
=5. Sustainability and climate change
=5. Public trust
=5. Leadership capability, accountability, stability
8. Customer and citizen centricity
9. Political paralysis and effective government planning and response
10. Workforce upskilling and transformation.
Going into 2020, the C-suite will have to take into account all of the points covered. The world of today does not resemble the world of the past, and we have no indication whether it will bear a resemblance to the world of tomorrow. To stay on the safe side, best to take into consideration all of the changing variables we mentioned.