The Election is Days Away - Here’s What The C-Suite Is Thinking About Now

In what is sure to go down as one of the most uncertain years of our time, we can find comfort in the fact that none of us are in this journey alone. And with the 2020 presidential election just days away, there has been no shortage of work to do -- my conversations with clients have been focused around the things that leaders can control and scenario planning for what they cannot. While there may be some question marks in our future, there is also significant opportunity to identify what is on the horizon and what lies ahead for businesses across industries, sectors and markets. Serving as our Chief Clients Officer, I have the privilege to interact with boards, senior management teams, investors and politicians across the country as they plan for the various election outcomes and pandemic repercussions. Here are the five takeaways that stood out to me:

1. Deal activity has increased significantly across many sectors. Other than the technology, healthcare and life sciences sectors, the deal market over the summer was rather slow. Fast forward to today: We have seen a significant increase in M&A activity (buy, sell and capital raises) across many sectors -- most surprisingly oil and gas -- spurred by historically low interest rates, tremendous dry powder in the private markets and increased optimism among executives. One specific area of deal activity that has been particularly popular is the use of special purpose acquisition companies (SPACs), which are designed to take companies public without a traditional IPO process and then a follow-on acquisition. My conversations with investment bankers and investors indicate these transactions will remain popular vehicles for the foreseeable future. What also rings true, however, is that executives are preparing for greater deal scrutiny as they pursue deals for growth and transformation in 2021, regardless of who is in office.
2. Companies provide a glimpse into the overall health of the US economy by continuing to release earnings and giving their business’ outlook for Q4 2020 and 2021. As companies close their books for the third quarter in a virtual environment, there are mixed results when it comes to the health of America’s largest organizations. Among the nation's biggest banks, those with large trading businesses reported stronger quarter earnings than banks more focused on the consumer markets. Airlines continue to be hit hard, forecasting several years for travel levels to stabilize and return to pre-pandemic levels. Pharmaceutical and healthcare-related companies remain key for the economy, as the pandemic drives healthcare need, despite uncertainty in the race toward a COVID-19 vaccine. Technology, logistics and certain retail businesses are also seeing rising demand fueled by the pandemic’s effect on e-commerce. And most recently the public alternative asset managers and private equity firms’ earnings have provided helpful insights into market dislocations along with sector and investments trends.
3. Companies continue to watch what’s happening in Washington — but not only the election. Although it seems unlikely that a resolution will be reached at this point, negotiations continue between Congress and the White House on an approximately $2 trillion relief package that many believe is needed to ensure the economic recovery. In fact, 76% of executives agree that business tax rates will rise to pay for pandemic relief, regardless of which party controls Congress. In the past weeks, sectors, markets and consumers have been closely watching the Justice Department and the lawsuits it has brought against the big players in the tech industry -- the outcome of the hearings, and others alike, will have the potential to reshape the current and future landscape for technology companies. 
4. Companies vary greatly on their strategies for returning to the office. Seven months into the pandemic, companies continue to plot their course to safely return to the office against a backdrop of rising COVID-19 infections in many states. There is great disparity among companies by industry and geography over whether they have returned, are phasing in returning, or if they will ever return to the office. Certain financial services companies began to return to the office in the summer, while many technology companies have announced that they’re not going back until at least summer 2021. A recent consistent and new trend that we’re hearing from senior executives is the importance of working together in person to maintain culture with a look forward to an in-office presence. The one thing that holds true, however, is that executives’ top priority remains employee health and safety for whichever option they choose moving forward. 
5. Business leaders have increasingly been outspoken on recent societal issues like racial and social injustice and other issues top-of-mind for their stakeholders. Over the past few months, CEOs across all sectors have continued to pledge to do more for racial and social inequality. Their efforts have been guided by candid discussions among their employees and have included focusing on providing more opportunities for diverse employees in their organizations, evaluating and improving the diversity of their boards, and making their businesses more accessible to all customers. The business community at large is realizing that it has a bigger role to play, as well as a responsibility in addressing these topics with their people and communities to drive real change. 

As I think back on my conversations with those responsible for driving growth across industries, I am truly inspired by the passion, determination and grit of these leaders and their people during the past months. The entire business community has pivoted in what seems like a blink of an eye to address the new demands of today’s world. There is more change on the horizon — but with change comes opportunity. Companies are preparing for a myriad of scenarios so that regardless of what lies ahead, they can be positioned to grow.