2024: Elections and Corporate Strategy

2024 is not just another election year - about half of the world’s population gets to vote this year. Although not all are as big a global media event as the US elections, there will be elections in 63 other countries (plus the European Union), including the UK, India, Pakistan, Taiwan, Austria, Indonesia, Bangladesh, Mexico, Iran, South Africa, South Korea and Ukraine. And not all will be as predictable in their results as the recent Russian elections.

NGS Global decided to poll CEOs and board members across the Americas, EMEA and Asia Pacific to understand how potential changes in government and policy were impacting their businesses, and more specifically their corporate strategy. We made a point to avoid party politics and focus instead on how CEOs are thinking and preparing. Read on because the results were sometimes surprising and even somewhat alarming.

CEOs in Africa worry about coups d’etat affecting their businesses. Following the controversies around the 2016 and 2020 elections, US CEOs now also worry about stability in their society, politics and commercial life. What could happen with Taiwan has major repercussions far beyond that country and its semiconductor business.

The Big One

There’s no denying that, blanket media coverage aside, the US elections will have the biggest impact--not just in North America but around the world. Key themes include protectionism, trade, stock market volatility, foreign policy, geopolitical stability and inward investment.

These topics are of concern to CEOs not just of US companies and multinationals but sometimes smaller companies in less high-profile locations, in ways that are sometimes not obvious. For example, US trade policy has significant knock-on effects with China’s response potentially having dramatic effects across the African continent as well as the rest of the world.

Foreign policy and protectionism have big, short-term impacts on raw materials (prices and availability) and supply chain disruption that are concerning many of our CEOs across multiple industry sectors. The global economy and geopolitics are so complex that while many of our CEO respondents are doing what they can to plan (e.g.,interfacing with government and preparing alternative strategies) but that complexity means putting well-developed strategies in place is very difficult “...there are just too many unknowns to develop suitable contingency plans with the current available information” in the words of one CEO in the industrial sector. Wait and See is a real choice for some CEOs. 

If the US moves to the right and becomes more inward looking (perhaps reducing support for Ukraine and becoming more protectionist) this has a massive impact not just on geopolitics but the whole world order, making corporate strategy planning very difficult. As one CEO respondent put it eloquently “Any incoming Drum-Beating leader that is far-right, isolationist, anti-climate, anti-human rights will hurt us… and [a certain US presidential candidate] emboldens the other Drum-Beaters around the world].”

The Rest of the World

While the US dominates the global scenario and CEOs' thinking, policy changes in other countries can have massive local effects. For example, the UK is strongly predicted in the polls to have a change of government this year and the frontrunning party first committed to a £28 billion ($35 billion) package of green/Cleantech investment, then decommitted - disruption in the Cleantech sector ensued, well before an election date has even been called.

CEOs in Africa seem to be closely monitoring inward investment not just from China but the rest of the world and India, which goes to the polls in April, as this has huge impact on their economies.

One CEO in the hospitality business was kind enough to explain in detail the multiple impacts of all the above on his corporate strategy – too detailed to even summarise here, but believe us, it is very complex and very challenging.

Conclusions

●      Some of the responses were very surprising. These elections are likely to have an even bigger impact on corporate strategy than we initially thought and there is a lot of anxiety and concern out there.

●      Our responses also highlight how interconnected the global economy is - the election in the US has major effects on trade with China, which has major knock-on effects in other countries and industries around the world in obvious and non-obvious ways.

●      We had expected more concern about specific policies such as climate change, but it is clear that broader and more fundamental issues such as political stability and disruption to international trade are worrying CEOs even more.

●      The impact of the elections in the US and so many other countries in 2024 will be huge on corporate strategy, that much is clear. However, the volatility and complexity of that impact is proving very difficult for CEOs to navigate, leading to a high level of anxiety and uncertainty.

●      There also seems a general mood that the likely changes will be for the worse.

Use your vote carefully.