Also: Hong Kong, gun law, and McDonald's rules.
Good morning.
Recession fears are clearly becoming embedded in business plans. Yet CEOs remain surprisingly optimistic about prospects for their own companies. That’s the finding of a CEO survey Fortune conducted earlier this month, in collaboration with Deloitte. Some topline results:
• 67% of the CEOs said they were either pessimistic or very pessimistic about prospects for the global economy over the next 12 months, up sharply from just 12% who said the same in our January survey. But only 15% were pessimistic or very pessimistic about their own industry’s performance over that period, and only 5% were pessimistic about their company’s performance.
• 43% of the CEOs responding said they expect their organization’s growth over the next six months to be “strong,” and another 6% said “very strong.” That’s down from January, but not catastrophically. At that time, 54% said “strong” and 11% said “very strong.”
Which means one of two things is true: either CEOs are deluding themselves about the impact a global recession will have on their company, or the coming recession will be an unusually mild one.
Asked to name the three biggest external issues that threaten to disrupt their business over the next 12 months, the CEOs cited inflation (82%), labor and skills shortages (59%), geopolitical instability (49%) and supply chain disruption (45%). That’s a change from January, when the pandemic was still top of mind and the invasion of Ukraine hadn’t yet happened. The top four then were labor/skill shortages (71%), the pandemic (56%), supply chain disruption (46%) and inflation (36%).
You can read more from the survey here.
Separately, two Fortune 500 CEOs—Progressive’s Tricia Griffith and United’s Scott Kirby—met with the Fortune Connect Fellows yesterday, to share their leadership journeys. A couple of excerpts:
“I treated it like a business plan, with lots of optionality, knowing there would always be glitches. If I knew [my husband] would be traveling and I had a really big business presentation, the odds that one of the kids would wake up with an ear infection that day were high, so I planned for it…You’ve got to be really plan-ful.”
—Griffith, on how she made it to the top while raising six kids
“Thirty or 40 people that work at United today are alive because of our vaccine mandate. It was just the right thing to do…[My view was] because it is the right thing to do, we are going to do it, and we will figure everything else out.”
—Kirby, on how he responded to opposition to United’s vaccine mandate
More on Fortune Connect here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Hong Kong
Beijing has taken the unusual step of asking foreign business chambers in Hong Kong for advice on how to get the city’s economy whirring again. The consistent response: enough with quarantine already. Bloomberg
Gun law
U.S. lawmakers have actually managed to pass bipartisan gun-control legislation. The law is a compromise, naturally, that will toughen some background checks, encourage state-level red-flag laws, and make it harder for domestic violence offenders to get weaponry. Fortune
McDonald’s franchising
McDonald’s is toughening up its franchising rules, making it harder for franchisees to keep existing locations or add new ones. It’s also going to tighten conditions for families that inherited McDonald’s locations, forcing them to designate one person as the operator. Wall Street Journal
Arm listing
The U.K. would love for the chip-design titan Arm, a great British success story (at least originally), to be listed in London—so much so that it might invoke national security legislation. But Masayoshi Son, founder of parent company SoftBank, still wants Arm to list on the Nasdaq. Financial Times
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Chicago exodus
Miami is “a vibrant, growing metropolis that embodies the American Dream—embracing the possibilities of what can be achieved by a community working to build a future together,” billionaire Ken Griffin wrote to employees of Citadel and Citadel Securities, both of which are moving from Chicago to Florida. Read the whole email here. Fortune
Vaccine impact
The global COVID death toll stands at 6.3 million, but a new study shows that without vaccines, another 14.4 million people probably would have died up to the end of 2021—or possibly even more if you look at excess deaths, which indicate the impact of unreported COVID deaths. Fortune
Mask on/off
Israel is considering reintroducing its mask mandate, as is Germany, thanks to the rise of super-infectious new Omicron subvariants that evade vaccine and infection-acquired immunity. Meanwhile South Africa, which has already been swept by the new wave, is ditching its mask mandate (and so is Thailand). Fortune
Abortion benefits
More advice for companies in the likely event of Roe v. Wade’s imminent overturning: watch out for legal risks around abortion benefits. As Fortune’s Paige McGlauflin writes: “It’s not just legislators that employers need to be wary of. Companies must also tread carefully around employees with antiabortion beliefs, who may feel compelled to report colleagues seeking abortion services.” Fortune
This edition of CEO Daily was edited by David Meyer.
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