Leadership Confidence Index

Leaders’ confidence in their executive leadership team—its capability, behavior, and management of critical issues—is on the rise, after a sustained period of decline.

While this is positive news for organizations, they must remain cautious, as concerns about economic uncertainty continue to loom and, although confidence levels have increased, they’re yet to return to H1 2021 levels.

Leadership Confidence Index H2 2023—6 key findings

01 CEO confidence rebounds

CEO confidence in their executive team has recovered in the last six months. According to our index, CEOs are becoming increasingly convinced of their executive team’s ability to work effectively together, and to role model the right cultures and behaviors.

But leaders must remain attentive, with CEO confidence notably behind its peak in H1 2021. At the same time, CEO perceptions of their executive team’s preparedness to address economic uncertainty has dropped in the last six months.

CEOs must continue to focus on building resilience to face economic uncertainty. To help their organization succeed, CEOs should focus on creating a high-performing C-suite and identifying leaders that will help drive forward growth.

02 Next-generation leadership confidence declines

Next-generation leaders—those who sit one or two levels below the C-suite—show lower levels of confidence in their executive leadership team across all measures.

While next-generation leaders’ confidence levels have largely been flat since H1 2022, they dropped slightly in H2 2023.

Our research shows that next-generation leaders have declining confidence in the executive leadership team's capabilities—especially in relation to digital transformation. This may in part be driven by organizations grappling with the rapid growth of generative AI.

While organizations navigate the opportunities and risks of new AI tools, they should prioritize leaders who can help drive innovation. Now more than ever, organizations must actively engage with next-generation leaders. Empowering them through development and robust succession planning is vital for talent retention and helps growth and performance in the long term.

03 Board confidence continues to sit well above that of the C-suite

The gap in confidence between C-suite leaders (excluding the CEO) and board leaders continues to expand, with board leaders’ confidence now 13.3 points higher than that of the C-suite.

Board members often have a broader and longer-term view, which may contribute to the disconnect in perceptions between board and C-suite leaders.

CEOs and board leaders should be circumspect about stagnant confidence levels amongst C-suite leaders, and seek to understand whether there are challenges aligning the C-suite with one another, or whether C-suite leaders—by virtue of their positions—are more aware of execution challenges that might limit strategic progress.

04 Leadership confidence in the healthcare sector increases

In the healthcare sector, leadership confidence in their executive team has rebounded since H1 2023, primarily driven by the team’s ability to embrace digital transformation and manage DE&I efforts.

Healthcare reports the highest increase in leadership confidence in H2 2023 across all industries measured, after experiencing the lowest confidence levels in H1 2023.

Healthcare leaders are investing in innovation—we see higher rates of turnover for R&D leaders and more CTOs joining the C-suite. But, leadership confidence in the healthcare sector remains below H1 2021 levels, as the industry is still in a state of transition post-pandemic. While the journey ahead appears to be clearer, the waters are still choppy. Leaders are doubling down on culture, purpose, and pragmatic execution.

05 Leadership confidence in the technology sector stabilizes

The technology sector saw a notable decrease in leadership confidence during the first half of year, falling 4 points between H2 2022 and H1 2023 as the industry navigated through over-hiring and subsequent layoffs in a period of macro uncertainty and shifting investment priorities, alongside increasing pressures to innovate. However, leadership confidence in the technology sector may now be stabilizing, given the 1.4-point increase in the last six months among executives.

Although leadership confidence has improved, leaders in the technology sector must stay vigilant. Fast-paced technological change driven by advancements in AI create real opportunity, while continued economic uncertainty and geo-politic factors (including technology export restrictions) create constraints. Technology leaders need to evaluate whether their executive teams not only have the right mindset, culture, and experiences to capture innovation opportunities, but also to navigate political and economic complexities. 

06 Leadership confidence rises in Europe, declines in APAC, and is stable in the US

Leadership confidence in their executive leadership team has increased in Europe in the last six months, with the largest regional increase recorded in Switzerland. Following a dip in confidence six months ago due to issues in the financial services sector, leadership confidence in Switzerland is now back to its H2 2022 high.

In the last six months, confidence levels in the US have remained relatively stable, while leadership confidence in APAC has decreased . Most notably, Australia has fallen 1.5 points in the last six months. There are several possible drivers for this, including media scrutiny of CEO behavior, criticism of the outgoing generation of C-suite leaders, failure of governance and leadership in the banking sector, and the new working environment.

While varying market and geopolitical dynamics drive these differences, a globalized world requires executives to evaluate and adapt how their organizations are managed. Executives must determine whether they have the right leadership in place to manage these complex, global perspectives.

Methodology

The Leadership Confidence Index captures the view of CEOs, C-suite leaders, next-generation leaders (those 1-2 levels below the C-suite), and board directors on the effectiveness of the executive leadership team (ELT) at their organization across three constructs:

Responses to these items are combined into an overall Leadership Confidence Index on a 100-point scale, as well as a sub-index on each of the three constructs.

The Leadership Confidence Index is derived from RRA’s Global Leadership Monitor, which is an online survey of executives and non-executives that gathers the perspective of leaders on the impact of external trends on organizational health and their leadership implications (first launched in 2021). Russell Reynolds Associates surveyed its global network of executives using an online/mobile survey from 12 September to 2 October 2023. Data from previous Global Leadership Monitor surveys were deployed in February/March 2021, March 2022, October 2022, and March 2023.

Authors

Ela Buczynska, Tom Handcock, and Gabrielle Lieberman of RRA’s Center for Leadership Insight conducted the research and authored this report.

Learn more about the authors and The Center for Leadership Insight

The authors wish to thank the 2,500+ leaders from RRA’s global network who completed the 2023 Global Leadership Monitor Fall Pulse. Their responses to the survey have contributed greatly to our understanding of leadership.