BREAKINGVIEWS-CEOs finally have a licence to cite “uncertainty”

Even before Covid-19 took hold, seeds of doubt were being sown far and wide

  
Train security officer wears a protective mask and gloves on the subway in Beijing as the country is hit by an outbreak of the novel coronavirus, China, March 16, 2020.

Train security officer wears a protective mask and gloves on the subway in Beijing as the country is hit by an outbreak of the novel coronavirus, China, March 16, 2020.

REUTERS/Thomas Peter

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

HONG KONG (Reuters Breakingviews) - One thing is clear: “uncertainty”. Despite being handsomely paid to navigate fog and volatility, chief executives routinely use the term as a limp excuse for poor performance or to implicitly critique policies or rules they simply don’t like. Covid-19, the viral disease spreading across the world, is the real deal, though, making it truly hard to read supply, demand, market swings and government action.

From the corporate corner suite, the uncertainty bogeyman lurks around every corner. Even Jamie Dimon, chief executive of JPMorgan JPM.N , cited it nine times in his 2018 letter to shareholders – with regard to China, interest rates, liquidity and more.

And if it’s not central banks or trade that’s up in the air, it’s Obamacare or Brexit. Policy is always uncertain – except when it isn’t. The threat of taxes rising often leads to a cacophony of company “uncertainty,” but the word can scarcely be heard when someone like U.S. President Donald Trump is determined to lower them. Bosses also tend to conveniently forget all the regulatory uncertainty when an economy is growing, for example during George W. Bush’s first presidential term at the turn of the millennium.

Even before Covid-19 took hold, seeds of doubt were being sown far and wide. PwC’s annual CEO survey, released in January, was entitled “Navigating the Tide of Uncertainty”, complete with storm clouds for illustration. “No matter where CEOs look or from where they are looking, the path forward is fraught with uncertainty,” the consulting firm concluded after polling some 3,500 chieftains last October and November. Li & Fung 0494.HK boss Spencer Fung said geopolitics and supply chains were creating a level of uncertainty unseen in 40 years. The term’s frequent use in the report confirms its emergence as a euphemism for corporate pessimism.

The viral outbreak that started in China, however, exposes executives who cried uncertainty before. It makes the world genuinely unpredictable. Australian airline Qantas QAN.AX , for one, declined to give investors any financial guidance with mass containment efforts being implemented. Likewise, the Organisation for Economic Co-operation and Development scrapped the March edition of its early-warning leading indicators series because it was unable to assess Covid-19's effects for many countries. It's fairly certain that, after “coronavirus” and “social distancing”, 2020’s business buzzword – for once, legitimately – will be "uncertainty".

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(Editing by Richard Beales, Jamie Lo and Sharon Lam) ((jeffrey.goldfarb@thomsonreuters.com; Reuters Messaging: jeffrey.goldfarb.thomsonreuters.com@reuters.net))