Large-company CEOs are confident in the U.S. economy, but most of them are making adjustments to near-term risks and structural changes that could be threats to growth.

KPMG's 2024 U.S. CEO Outlook Pulse Survey found that 87% of chief executives are confident in the economy's growth prospects, and 78% are confident in the growth of their organization. But they are making strategic adjustments to combat risks that include regulatory concerns, operational issues, cyber security, and tax.

The survey polled 100 CEOs from U.S. companies with between $500 million and $10 billion in annual revenue in February and March.

In the survey, the CEOs' key challenges and opportunities for driving growth are:

Generative AI. CEOs are investing in the new technology, and they have initiatives in place to promote responsible use of generative AI, the survey showed.

More than 40% of CEOs plan to increase their organization's investment over the next year, and more than 75% are confident that their leadership has a good understanding of generative AI and how to use it to gain benefits today and plan for the future.

Among the top challenges for deploying the technology: ethical concerns, security and compliance, and integration with existing systems and processes.

Talent and culture. CEOs, according to the survey, are focusing on initiatives to promote employees' mental well-being and prevent burnout. A majority of CEOs last year (62%) envisioned a five-days-in-the-office model in three years' time. Now, that thinking has shifted, as 46% say they envision a hybrid work model, and just 34% envision an environment where corporate employees work full-time in the office.

Additionally, CEOs are working to solve issues related to a tight labor market by upskilling current employees, deploying generative AI to fill gaps in talent, and dropping college degree requirements for certain jobs.

Almost three-fourths are implementing more initiatives focused on mental well-being such as digital wellness solutions, mindfulness seminars, resilience workshops, and coaching sessions.

Mergers and acquisitions. CEOs are waiting for the right time to make new deals, the survey found. More than 60% say their organization will not make significant investment decisions until after the presidential election in November. Among the other variables affecting buy-and-sell decisions are high interest rates, shifting business valuations, the geopolitical landscape, and inflation.

Sustainability initiatives and ESG. The execution of ESG initiatives is the top operational priority for CEOs, followed closely by capital and input costs, digitization and connectivity across the organization, supply chain agility and resilience, and the customer experience. Most leaders, according to the survey, expect to see significant returns on sustainability investments in three to five years.

To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.