As American politics has increasingly featured politicians of both parties leveling tough criticism of big business, a new survey shows a sharp jump in the number of American executives saying they are concerned that the public’s distrust of corporations is a significant threat to their growth prospects. Eight years after the financial crisis, a full 63 percent of chief executive officers told PriceWaterhouseCoopers researchers that a lack of trust in business has become a significant worry — double the number who said the same in 2013.
The consulting firm’s annual survey of more than 1,400 CEOs showed that just 12 percent of American CEOs believe global economic growth will improve in 2016 — a huge decline from the 55 percent who said they were confident in that growth in the same survey a year ago. That decrease was also mirrored among CEOs in other countries. The survey results were released on the eve of the World Economic Forum in Davos, Switzerland, where corporate leaders, financial moguls and governmental leaders are meeting for 3 days of public panels, private meetings and parties.
Amid an election season featuring calls by Democrats for a crackdown on Wall Street and new taxes aimed at the wealthy, 90 percent of American CEOs surveyed said they are concerned about the prospect of overregulation. More than two-thirds say they are worried about facing an increasing tax burden heading into 2016. Such concerns have been intensified by a “free-for-all” presidential campaign in the United States, said Bob Moritz, U.S. senior partner of PwC.
Those results, though, have not tamped down optimism in at least some business sectors. Nearly half of the American CEOs surveyed said they expect to increase their workforce in the coming year. Globally, two-thirds of CEOs in the financial sector say they are expecting to increase their workforce in the coming year. In the United States over the last few years, that sector represents between 7 percent and 9 percent of GDP — a rise that has correlated to the rising economic inequality now taking center stage in the 2016 presidential race.
In the last two years, Congress has considered — and at times been successful — in rolling back some of the regulations in the landmark Dodd-Frank legislation that was passed in the wake of the 2008 financial crisis. PwC Chairman Dennis Nally said that CEOs’ feelings of uncertainty today stems in part from the fact that some of those regulations remain in flux.
“When you think about where that regulatory pendulum is today, versus where it could have been post the financial crisis, I think you see many business leaders from around the world that are still very much concerned that the regulatory reforms are still being enacted,” he said. “There is still uncertainty with regard to how some of these rules and regulations are going to play out.”
PwC, which provides auditing and compliance services to companies, is an active political player in the United States. Since 2008, the company has spent more than $21 million lobbying congress and the federal government on issues such as financial rules and tax policy, while its employees have delivered more than $12 million in campaign contributions to federal candidates. In his presentation, Moritz specifically cited the tumult in the Democratic presidential primary as shaping CEOs concerns about “what new regulations may be coming.”
“That does play into the primaries that have been started already in terms of which political positions are being staked out and how far to go,” he said, citing Vermont Sen. Bernie Sanders’ “big bravado around breaking up the banks” as an example of what is stoking CEOs uncertainty.
Moritz added that corporate leaders are listening carefully to “what’s being said by those candidates and their ability to lead in bringing not only the White House but the Congress and Senate all together to actually provide a little bit more certainty for the business community.”