European CEOs Respond to the Eurozone Crisis


Yesterday we looked at how past emerging markets can offer valauble lessons to European leaders amid the crisis in Greece. Today, we focus on how the turmoil in the eurozone is affecting European CEOs, and what lessons executives can take away from the recent financial crisis in the U.S. and the situation in Greece.

Why is eveyone else worried about Greece? Let's recap. If Greece defaulted, it could potentially topple financial institutions from French pension funds to German banks. Europe's economy could go into recession, which would reduce companies' abilities to compete internationally. And, if Greece defaults, will Italy, Portugal, Spain, and Ireland follow? How will a recession in Europe affect the rest of the world?

Ongoing talks are happening today in Athens regarding the replacement for PM George Papandreou. The BBC reports "Government sources told the BBC on Tuesday: 'It seems that a deal is very close.'"

Even if the outcome after today's cabinet meeting provides good news from Greece, which we are obviously hoping for, what are the concerns of European CEOs and what are they doing to prepare?

What do European executives have to say about the situation in Europe?

Businessweek reports: “'We would have to prepare for a slower economy and maybe even a slight recession in Europe,' Peter Voser, CEO of Royal Dutch Shell Plc, Europe’s largest oil company, said in an interview in Cannes. 'We need a fast solution and then we deal with the consequences. From a business perspective, if this goes on too long, so much uncertainty, investment will be delayed.'"

"Daimler AG, maker of Mercedes-Benz, last month reported its first earnings decline since the third quarter of 2009, burdened by expenses for new models. 'The problem that we see is that the debt crisis risks unsettling consumers, and unconfident consumers don’t buy premium cars,' Eichiner said. “We are already seeing signs of weakness in southern Europe.”

"To be sure, some executives say they will continue to expand despite the region’s troubles. 'We will continue to work and invest,' Christophe de Margerie, CEO of Total SA, Europe’s third-largest oil company, said yesterday in Cannes. 'On everything that is linked to access to natural gas and long term energy reserves we will continue to spend.'

What are some key points executives can take away from both the U.S. and European financial crises?

  • Regulate. In the U.S. it was a lack of regulation in mortgage lending. In Greece, it was with debt. Over-regulating is of course as equally unproductive as a lack of regulation, but examine how rules are designed, who adapts them, and monitor compliance.
  • Be transparent. Not only in how the company makes money, but how does it spend money? Where are the resources coming from and where are they going, and how are they being allocated?
  • Instill trust. Trust is built upon social benevolence, transparency, authority, and accountability.

What other valuable lessons can executives learn from the current financial turmoil? Share your thoughts on the AESC/ BlueSteps LinkedIn page.

This article was written by Joe Chappell from the Association of Executive Search Consultants (AESC).

About BlueSteps
BlueSteps is the exclusive service of the AESC that puts senior executives on the radar screen of over 8,000 executive search professionals in over 70 countries. Be visible, and be considered for up to 75,000 opportunities handled by AESC search firms every year. Find out more at www.BlueSteps.com.  

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About the author

This article was written by Joe Chappell, Managing Director, Global Marketing at the Association of Executive Search Consultants (AESC).

About the Association of Executive Search and Leadership Consultants

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