Regulation is a key concern for CEOs in India: John B Veihmeyer
KPMG chairman Veihmeyer on challenges to growth and why Indian CEOs were more confident than their global counterparts about their businesses
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New Delhi: John B. Veihmeyer is global chairman of KPMG International. The firm just released its annual survey of CEOs worldwide in a report titled “Now or never: 2016 Global CEO Outlook” . In an interview, Veihmeyer who was in India to chair a partners’ meet, spoke about the challenges to growth as perceived by corporate leaders and why Indian CEOs were more confident than their global counterparts about their businesses and the economy in general. Edited excerpts:
Is India distinct from how you are approaching the rest of the world or is there a common theme?
I think there is a very common vision and strategy for KPMG everywhere we operate. But, one of the unique strengths of KPMG is how we balance local entrepreneurship and that sense of partners in each of the countries where we operate feeling a high degree of accountability and responsibility for being responsive to the local market while still maintaining strong consistency. We have one global vision and we have got a strategy, which encompasses the things that we have to be consistent in everywhere we operate but it leaves a lot of room for local country leadership like here in India to tailor that strategy that makes sense for the marketplace. The marketplace in India is very different from other places. Our position in India is different than other places. So, for many reasons like that, it is really important that we give the leadership in various countries that we operate the ability to really drive those initiatives, which will result in being the best firm in the local market.
Does your vision change according to what’s happening globally? Do you think post-Brexit, you need to change your strategy?
Vision definitely has not changed; it is very aspirational. I think in terms of strategies, there are certain elements, tactics, which will have to be reactive to the marketplace around us. In our world, things that create challenges also create opportunities and you have to be agile and respond quickly to those kinds of dynamics, which come up in the market place.
What are the key challenges for Indian companies? Do you agree with the challenges that CEOs in your survey state or are they going to be different?
I think most of it I hear when I talk to people. The CEOs we surveyed indicate that their top concerns are cyber security, regulations, technology. They talk about technology as an enabler for new opportunities and how it also has some risk to it, which is cyber and certainly regulation.
KPMG surveyed 125 CEOs in India and the survey threw up certain threats and opportunities. Is there anything that surprised you?
The major theme with respect to India is slightly higher confidence—almost across the board. On most of the questions, confidence is up on an overall basis year over year globally. On most of the questions, it was more than slightly higher. That makes sense if you think about what drives confidence, it is an environment that allows you to continue to grow, accelerate your growth. For KPMG, India is our fastest growing market and I think that’s true for a lot of other companies. CEOs here are feeling more confident than their global counterparts and generally, the risks are pretty consistent as well. Regulation is the key concern in the minds of CEOs here. The global economy more than local is on the top of their mind. Certainly, this whole theme of innovation and linkage of disruptive technology to innovation comes strongly from Indian CEOs given the technology talent, which is resident here.
In the last two years, we have seen confidence levels of Indian CEOs being higher than their global counterparts and yet, we have not seen any step-up in investments. Can you explain that dichotomy?
I think India is in the middle of the reform period. There is a lot of structural reforms that is taking place. I think that creates uncertainty in the short-term and uncertainty is a depressant on investments, for sure. That’s causing people to hold back a little bit right now. But CEOs are saying over the three-year period time frame, they will be hiring, investing, etc. I think that is the difference.