This article first appeared in The Edge Malaysia Weekly on January 5, 2026 - January 11, 2026

THE Vistage CEO Confidence Index surged to 101.1 in 4Q2025, marking a decisive shift into expansionary territory. The 8.2-point or 9% quarter-over-quarter (q-o-q) increase is the largest in three years (See table on this page). It indicates a sharp improvement in CEO optimism following a modest turnaround in Q3. This second consecutive quarter of increase in the index breaks a prior three-quarter downtrend, confirming a positive inflection point.

Crossing the benchmark level of 100 reflects a fundamental shift from contractionary to expansionary sentiments. The surge was likely bolstered by recent robust data, including higher-than-expected GDP growth of 5.2% in 3Q2025 and double-digit trade performance in September and October 2025. While the higher index in 4Q2025 points to improved expectations for revenue, investment and hiring in the near future, it would need to exceed 110 to signify robust confidence.

Performance of key index components

A synchronised uptick in CEO confidence was evident in 4Q2025, led by a sharp 18% surge in the current economic conditions component. The remaining five components also posted solid gains of between 6% and 9%, reflecting broad-based optimism across all business dimensions.

This improved outlook is driven by a pronounced shift in CEO expectations. The proportion of CEOs anticipating improvement rose across all components, while there is a corresponding decline in those expecting deterioration. Together, these trends underscore a firming consensus that the business environment is on a sustained positive trajectory, a trend examined in detail for each component in the following sections.

Improvement in current economic conditions

The current economic conditions sub-index showed the sharpest improvement of all components, surging 14 points to 93, or an 18% q-o-q gain. This sharp rebound is aligned with better-than-expected performance in key economic indicators such as GDP growth, trade, employment, wages and ringgit strength.

Despite this significant uplift, the index remains below the critical 100 threshold, indicating that although conditions are improving, a net negative assessment of the current environment persists. As shown by a breakdown of the data, the proportion of CEOs reporting worsening conditions still exceeds those seeing improvement. Nonetheless, the momentum is clearly shifting. Negative expectations fell to 31% from 39%, while those anticipating improvement rose to 24% from 18%. This 13-point net swing in expectations suggests downward pressures are easing. Meanwhile, the proportion expecting no change in the current conditions edged up slightly to 45% from 43%, suggesting that a near majority of the CEOs see conditions stabilising at current levels.

More positive expectations on future economic conditions

Optimism for future economic conditions was sustained in 4Q with the corresponding sub-index rising 6% to 108 points. While this level sits above the 100-point expansion threshold, it remains well below the 2024 average of 133, suggesting tempered optimism relative to the previous year.

The underlying survey data reveals continuing positive shift in sentiment. The proportion of CEOs expecting improved conditions over the next 12 months rose to 32% from 29%, while those less optimistic declined to 24% from 28%. The remaining 44% anticipate conditions will remain unchanged. The net positive gain of 7 percentage points, coupled with the rebound in current conditions, signals strengthening confidence in the economic trajectory. This alignment of improving present and future outlooks creates a more supportive environment for business initiatives, including capital investment, hiring and market expansion.

Hiring intentions trended up more strongly

Hiring intentions strengthened further in 4Q, with the corresponding sub-index jumping 7% to 140 points. The upward trend is reflected in CEO sentiment where the proportion of CEOs planning to expand their workforce rose to 49% from 43% in the prior quarter. This trend correlates with the drop in the country’s unemployment rate to 3.0% this year from 3.1% in 2024. Meanwhile, those anticipating a pullback in hiring fell to 9% from 12%. The widening gap between optimistic and pessimistic outlooks signals increasing confidence in sustaining the growth in headcount.

Sustained rise In planned fixed investment

In line with stronger hiring intentions, the planned fixed investment sub-index rose 8% to 138 points, underscoring broader business confidence. Planned fixed investment has recovered to the level recorded in 1Q but remains 5% below last year’s average of 145 points.

The CEOs’ intentions underpin this uptrend whereby those planning to increase capital expenditure rose to 50% from 43% in the previous quarter while those anticipating weaker investment conditions declined to 12% from 15%. The sustained recovery in capital spending aligns with and support the expansion in workforce.

Further improvement in revenue growth expectations

The expected revenue growth sub-index rose 9% to 150 points in 4Q, nearing the high levels seen early in the year before significant global trade disruptions. This rebound aligns with improved expectations for future economic conditions, though it remains 5% below the previous year’s average.

The survey responses reveal a clear shift in sentiments with 60% of CEOs now expect stronger revenue growth, up from 52% last quarter, while those anticipating a decline fell to 10% from 15%. The share expecting no change dipped slightly to 30%. This significant increase in optimism suggests businesses are positioning for a more robust sales environment in the coming months.

Profit growth expectations continue to trend up

The profit growth sub-index rose 8% to 135 points in 4Q, emulating the positive trend in revenue expectations. CEOs expressed greater confidence whereby half (50%) now foresee improving profits, up from 44% in Q3, while those anticipating a decline fell to 15% from 19%. The share expecting profits to remain stable also edged down slightly from 37% to 35%. This broad-based shift with movement away from negative and neutral outlook, indicates that CEOs are confident in translating stronger revenues into bottom-line results. It likely reflects expectations of sustained demand and operational efficiencies.

Orders and selling prices

Rising confidence in order books

Order expectations strengthened across the board in 4Q, with both local and export demand showing marked improvement. For local orders, 50% of CEOs now expected improvement, up from 45% last quarter, while those anticipating a decline eased to 12% from 15%.

The outlook for export orders is even stronger as 52% of CEOs now foresee better performance, rising from 46%. Those expecting slower export growth fell to just 9% from 13%.

This parallel uplift, particularly the more robust optimism for exports, points to broadening demand momentum, supporting both domestic market and international expansion plans.

Prices expected to remain stable

Price expectations edged upward in 4Q, with 37% of CEOs anticipating price increases, up from 35% last quarter. The proportion expecting declining prices fell to 10% from 12% while a majority (53%) foresee prices remaining unchanged. This subtle but discernible shift toward firmer pricing sentiment suggests rising input costs or strengthening pricing power may be emerging in certain sectors. The declining share of CEOs expecting price declines indicates a reduction in deflationary pressures.

These underlying trends suggest companies should prepare by reviewing procurement strategies to mitigate input cost risks. They should evaluate opportunities to pass on cost increases where market conditions allow and reinforce value proposition of their products and services to protect margins as pricing dynamics evolve.

Effects of ringgit appreciation

The ringgit has appreciated significantly in 2025, strengthening by about 9% against the US dollar to around RM4.06 by the end of 4Q. It has also appreciated by approximately 6% against a basket of trading partners’ currencies.

The CEOs’ sentiments reflect a net positive assessment of the appreciating trend. Nearly half (47%) reported no material impact, while a combined 38% viewed the effects as positive (31% moderately, 7% significantly). In contrast, only 14% experienced negative consequences (11% moderately, 3% significantly).

The divergence in the responses highlights varied exposure to currency movements.

Strategies to cope with ringgit strengthening

Faced with a strengthening ringgit, CEOs are deploying or considering a range of targeted strategies, reflecting their varied exposures and risk profiles.

The most common response is defensive where 38% of CEOs are focusing on cost optimisation through tighter internal cost controls to protect margins. Notably, a significant portion (34%) plans no significant strategic changes, a stance that aligns with the nearly half of CEOs who reported neutral effects from currency movement.

Apart from these two dominant responses, CEOs are also looking at proactive and tactical adjustments. These include (a) reviewing pricing strategies in international markets (30%); (b) re-evaluating their supply chains to source more locally or from countries with weaker currencies (21%); (c) pursuing market diversification toward regions where the ringgit’s strength offers an advantage (17%); (d) adjusting their foreign exchange hedging policies to manage future volatility (15%), and (e) accelerating capital expenditure to acquire now-cheaper imported machinery or technology (12%).

Effects of ringgit appreciation

The diversity of strategies underscores that currency impact is not uniform. The split between defensive cost-containment, strategic inertia and proactive adaptation suggests companies’ responses are shaped by specific trade flows, cost structures and competitive positioning.

It is crucial for firms to conduct a detailed currency exposure audit to determine which strategic lever is most appropriate, benchmark against industry peers to avoid being out-competed, and maintain operational agility to shift tactics if the currency trend persists or reverses. The minority (12%) accelerating capex reveals a strategic opportunity to leverage currency strength for long-term productivity gains and technological upgrading.

Most CEOs are neutral about the ringgit’s continuing trajectory

Asked about their confidence that the ringgit will maintain the current trajectory in the next 12 months, a majority (61%) remain neutral, signalling widespread uncertainty or a “ wait-and-see” approach. However, nearly a third express confidence, with 27% confident and 4% very confident in the ringgit’s sustained strength. Only a small minority (8%) are not confident the trend will continue.

This sentiment breakdown shows that while outright pessimism is limited, strong conviction is also scarce. The dominant neutral stance suggests that many CEOs do not see a clear, durable catalyst for further appreciation and may be anticipating stability or increased volatility. The prevalence of neutral sentiment amid elevated global uncertainties calls for a prudent and flexible strategy for businesses to avoid overexposure and prioritise flexibility and hedging to manage potential currency reversals.

Owners and drivers of AI strategy

AI strategy largely driven by C-suite Leaders

Based on the survey results, the leadership and governance of AI strategy within organisations reveal a clear top-down approach, with significant variation in ownership and a notable gap in formal planning.

AI strategy development is predominantly executive-led, with an estimated 70-75% of firms driven by C-suite leaders that include the CEO, managing director, or president. This indicates that AI is largely viewed as a strategic priority with significant organisational implications, requiring top-level direction and resource allocation. While C-suite leadership ensures alignment with business goals, it must be coupled with strong technical leadership (IT/CTO) and cross-functional engagement to ensure feasible and integrated execution. This gap between strategic alignment and execution is the main potential risk underlying this leadership approach.

A substantial minority (25-30%) report that IT or technology leaders such as IT head or chief technology officers act as key or co-leaders. This reflects the technical complexity of AI implementation, though it may also suggest that in some firms, AI is still perceived primarily as an IT initiative rather than a cross-functional business transformation.

Other notable drivers include external consultants (12-15%) who can accelerate strategy development but may raise challenges in long-term ownership and internal capacity building. To reduce dependency risks, those relying heavily on external consultants must plan for knowledge transfer and internal capability development to sustain AI initiatives over the long term.

Nearly one in 10 respondents (8-10%) lack a defined AI strategy or owner, representing a significant strategic gap and potential competitive vulnerability. Without a clear driver, the businesses risk falling behind in efficiency, innovation and competitive response.

A small minority (4-6%) employs cross-functional committees, suggesting a collaborative approach to optimise diverse inputs. A slightly smaller minority (3-5%) are driven by functional department heads that indicate bottom-up, use-case driven adoption in some areas. In a limited number of cases (2-3%), AI strategy is driven personally by founders or owners, highlighting the role of individual vision in smaller or entrepreneurial businesses. These multiple driving models ranging from top-down to committee-led suggest that there is no one-size-fits-all approach. Nevertheless, CEOs are advised to consciously design AI governance structures that fit their culture, size and strategic objectives.

The varied approaches to leadership and the noticeable segment without any strategy indicate that the journey toward mature, organisation-wide AI adoption is still evolving. Companies should ensure that leadership is accompanied by the right mix of technical expertise, cross-functional collaboration, and formal strategic planning to translate vision into sustainable value.

The single process CEOs would automate for AI’s biggest ROI

When asked to identify the single business process, if automated or enhanced by AI, that would deliver the fastest and largest return on investment (ROI), the CEOs’ responses were wide-ranging which is unsurprising given the highly diversified nature of Vistage CEOs’ businesses as described in the previous quarter’s report.

The responses highlight a strategic focus on both growth generation and operational efficiency, with clear priorities emerging across seven key categories.

The concentration of responses in customer-facing and revenue-generating areas (marketing/sales and customer service) indicates that CEOs prioritise AI initiatives with direct financial impact, whether through accelerating revenue or reducing high-volume service costs. Meanwhile, strong interest in operations, administration, and finance reflects a parallel drive to lower operational costs and improve accuracy in resource-intensive, error-prone tasks.

Based on the survey results, the implications for AI business strategy are as follows:

•    Start with revenue and high-volume touchpoints: Pilot AI in marketing, sales and customer service to achieve quick, measurable returns that can fund broader AI adoption.

•    Target low-hanging fruit in operations: Processes like inventory management, invoice processing, and data entry are ripe for automation, offering clear ROI through time and cost savings.

•    Adopt a phased, use-case-driven approach: Given the varied responses, a one-size-fits-all AI strategy is less effective. Companies should identify and prioritise specific high-impact processes within their unique operational context.

•    Balance quick wins with strategic transformation: While focused automation delivers immediate ROI, leaders should also consider how discrete AI projects can integrate into a longer-term digital transformation roadmap.

A key survey insight is that CEOs view AI not as a monolithic solution, but as a tool for targeted enhancement, applied first where it can either generate revenue quickly or eliminate significant operational inefficiency. This pragmatic, ROI-focused approach can help organisations scale AI adoption sustainably and with clear business justification.

Future business planning and key financial metrics

A third Of CEOs considering synergistic business acquisitions

Peeking into the CEOs’ strategic plans over the next three years reveals a clear focus on strategic growth and portfolio optimisation, with actions segmented into distinct pathways.

•    Growth through acquisitions (33%): A significant one-third of CEOs are prioritising synergistic acquisition. This suggests a strategic preference for accelerating growth by consolidating market share, acquiring new capabilities, or entering adjacent markets more rapidly than organic expansion allows. This trend typically signals confidence in access to capital coupled with a view that strategic assets are reasonably valued with a strategic fit with existing businesses.

•    Capital market plans (12%): The 12% aiming for an IPO or stock exchange listing are planning a major financial and operational milestone. This strategy is typically pursued to raise capital for significant expansion, facilitate owner exits, or increase corporate prestige. It suggests these companies are positioning for a phase of accelerated, capital-intensive growth and are preparing for the rigour of public market scrutiny.

•    Portfolio rationalisation and exit (12% combined): The combined 12% planning partial (8%) or majority (4%) disposals reflect a strategy of portfolio optimisation. This could involve divesting non-core units to focus on key strengths, unlocking capital, or preparing for a full exit. This trend often emerges in maturing industries, during leadership transitions, or as a strategic pivot.

•    The “other” majority (41%): The largest segment, at 41%, planning “other” strategies, likely encompasses a wide range of organic growth initiatives, such as digital transformation, major market expansion, heavy R&D investment, or business model evolution. The size of this category underscores that for many companies, the primary strategic lever remains internal innovation and capability-building rather than transactional moves.

In summary, the data paints a picture of a proactive leadership cohort actively shaping their futures. While distinct strategic paths are evident, the common thread is a move away from static operation toward decisive, transformative action, whether through buying, selling, going public, or fundamentally reinventing from within.

CEOs report healthy financial foundation with distinct risk pockets

The survey reveals that a majority of businesses are operating from a position of financial strength, providing a solid base for both stability and strategic investment. However, the data also identifies vulnerable segments that warrant close attention.

Strong overall liquidity buffer with a minority under pressure

Liquidity coverage is robust for most firms whereby 87% of companies report adequate to strong liquidity (1.0x coverage or higher), with 41% in the healthy-to-strong range (>1.5x). This majority is well-positioned to navigate short-term uncertainties, maintain smooth operations and fund opportunistic investments without resorting to external financing.

The strong aggregate liquidity is a positive indicator for near-term economic resilience. However, the 13% with coverage below 1.0x may face immediate cash flow constraints, limiting their ability to weather downturns or invest in growth, potentially forcing them into reactive cost-cutting or expensive short-term borrowing.

Conservative debt profile prevails but high debt poses risk

The gearing ratio analysis shows a similarly healthy but bifurcated picture. About four in five businesses (79%) maintain low-to-moderate gearing (below 50%), indicating conservative balance sheets with ample debt capacity for future strategic needs.

Conversely, one-fifth of firms (20%) operate with high or exceedingly high gearing (above 50%), including 4% at critically high levels (>75%). While the low aggregate leverage is a sign of prudent management, the highly geared minority faces significant risk. These companies are more vulnerable to interest rate hikes, earnings volatility and credit market tightening, which could trigger financial distress and constrain their strategic options.

The concurrent analysis of liquidity and gearing provides a comprehensive view of financial health. For the strong majority with adequate liquidity and low gearing, the priority should be strategic deployment of strong balance sheets. This is an opportune time to invest in innovation, acquire strategic assets, or gain market share from weaker competitors.

For the vulnerable segments covering companies in the risk categories, they must prioritise financial fortification. Those with low liquidity need immediate focus on working capital management and cash flow preservation. Those with high gearing should pursue debt reduction and operational efficiency to build resilience ahead of potential economic headwinds.

Indicative 2026 bonus and salary increments

Majority indicate staff salary increases to range between 1%-7%

Nearly half (49%) of CEOs are clustering raises in the modest 1%-5% range for both managerial and non-managerial staff in 2026. A quarter (25% for managerial staff; 26% for non-managerial staff) of CEOs plan to increase staff salaries by 5%-7% while close to 10% (8% for managerial staff; 9% for non-managerial staff) of CEOs expect to raise staff salaries by 7%-10%.

Only 5% of the CEOs plan to raise salaries of managerial staff by more than 10% while only 4% intend to pay non-managerial staff by more than 10%.

More differentiated bonus payouts

Asked about bonus payouts, a significant portion (37-43%) of CEOs plan for minimal bonuses of zero to one month, which may reflect conservative profit expectations or a shift toward other reward mechanisms. Managerial staff are more likely to receive higher bonuses. The data shows 18% of CEOs expect to pay two to four months for managerial staff while only 12% indicate a similar payout for non-managerial staff. Only 1–2% of CEOs indicate four to six months bonus payments and 1% indicate more than six months’ bonus for managerial staff.

The 2026 compensation outlook has several key implications. On talent retention and market positioning, the modest across-the-board salary increases may help maintain internal equity but could risk losing top talent to competitors offering more aggressive base pay. The bonus structure becomes the critical tool for rewarding and retaining key managers and high performers. On cost management and flexibility, financial predictability is enhanced through controlling fixed costs (salaries) while maintaining discretion over variable costs (bonuses) tied to company and individual performance.

Another implication on strategic signalling is that the conservative bonus outlook for a large segment of the workforce may signal cautious profit forecasts or a priority on reinvesting cash flow into business operations over distributed rewards. Companies should ensure their compensation philosophy is clearly communicated. Differentiating bonuses must be perceived as fair and tied to transparent performance metrics to avoid morale issues among non-managerial staff.

The survey results affirm that CEOs are opting for steady, inclusive salary growth while using bonus pools strategically to incentivise leadership and anchor top-tier talent, aligning reward structures closely with both financial prudence and performance outcomes.

Key age-based trends show overweight prevalence and mental stress anomaly

“Health is wealth” — CEO wellbeing reveals age and gender patterns

The proverb “health is wealth” emphasises that good health is more valuable than material wealth. It suggests that prioritising health is crucial to a fulfilling life. The survey question on CEO health risks provides a valuable benchmark, revealing that physical health concerns largely follow expected age-related trends, while mental stress presents a notable divergence, particularly among younger leaders and women.

Health risks among CEOs demonstrate clear age progression, with one significant exception that indicate a pervasive mid-career challenge. The issue of being overweight is consistently high, affecting nearly 40% of CEOs aged 30 and above across all older cohorts. This indicates a widespread lifestyle challenge that emerges early in leadership tenures and persists with age.

The data exhibits the expected age gradient whereby conditions such as high blood pressure, high cholesterol and diabetes show a marked increase in incidence with age, aligning with typical epidemiological patterns. Unsurprisingly, the youngest cohort (20-30 years) reports low levels of these conditions.

Another salient characteristic is the mental stress divergence. Contrary to other metrics, mental stress peaks within the 30-40 year-old cohort (37%), exceeding levels reported by older age groups. This suggests the pressures of establishing leadership, driving growth and balancing personal commitments may be most acute during this career phase.

Gender comparison reveals similar trends with distinct risk profiles

When segmented by gender, the overarching trends hold, but key differences in prevalence emerge.

Female CEOs show a particular concentration of risk in high cholesterol, mental stress and being overweight, with the 60-70 year cohort exhibiting higher incidence across multiple indicators. Notably, overweight incidence is highest (38%) in the 40-50 year-old group.

Male CEOs face more pronounced levels of metabolic and organ-related conditions, including notably higher incidence of high uric acid, diabetes and fatty liver. The overweight rate for men remains at around 40% for all cohorts above 30.

The overall profile and comparative analysis confirm that female CEOs maintain a better overall health risk profile across most physical indicators. However, they report a higher incidence of mental stress compared to their male counterparts, a critical finding for holistic wellbeing strategies.

The data transcends personal health, offering implications for organisational resilience and leadership sustainability. The high prevalence of modifiable risk factors like being overweight and high cholesterol across all age groups points to potential future health crises that could disrupt leadership continuity. Proactive health management is not just personal but a corporate governance imperative.

The peak of mental stress in the 30-40 age bracket identifies a critical vulnerability period. Organisations that invest in mentorship, realistic goal-setting and mental health support for this cohort may safeguard their pipeline of future senior leaders.

The distinct risk profiles suggest that effective corporate wellness programmes cannot be one-size-fits-all. Support for metabolic health may be a priority for male leaders, while creating open environments to address stress and cholesterol management could be more impactful for female leaders.

CEOs who prioritise their own health send a powerful message, helping to destigmatise these issues and foster a broader culture of wellbeing within their organisations. The proverb “health is wealth” holds profound professional truth. Overall, the survey reveals that the health of leaders carries predictable patterns but also unique pressures. Addressing these risks systematically is not merely a personal benefit but a strategic investment in the stability, performance, and longevity of the organisation itself.

Vistage’s dual impact: Forging strategic leaders and enriching lives

As 2025 draws to a close, CEOs were asked to reflect on the value of their Vistage membership. The responses reveal a deep dual impact of sharpening strategic acumen and enhancing holistic effectiveness as leaders and individuals, ranging from professional skill-building to personal well-being.

A consistent pattern of high-value gains were cited by CEOs across three development cores together with the percentage of CEOs reporting specific benefit. 

In the leadership and relational abilities (83-89%), a closely clustered set of high scores reveals development in the core relational and socio-economic roles of leadership. Members report becoming more effective leaders with benefits extending to personal relationships, alongside tangible improvements in empowerment, listening, accountability and cultural leadership. This indicates that strategic growth is seamlessly coupled with the soft skills required to execute that strategy through others.

In personal discipline and integration, a lower but still sizeable proportion of members (69-71%) report significant gains in time management and work-life balance. This highlights that the journey toward effective leadership also fosters greater personal sustainability by showing how to maintain performance without burnout.

The key implication for organisational development is that investing in a CEO’s development within a structured peer network like Vistage yields a multiplier effect. The benefits cascade from the individual leader to their team’s empowerment, the company’s culture, and ultimately to the sustainability of the leader’s own performance. This makes peer advisory participation a strategic tool for building more resilient, adaptive, and human-centric organisations. The mission to “enhance lives” is fulfilled by simultaneously strengthening the leader’s mind, relationships, and personal foundation.

Vistage Malaysia has engaged Professor Dr Yeah Kim Leng as its adviser and collaborator for the quarterly Vistage CEO Confidence Index. Yeah is a distinguished Malaysian economist with extensive experience in academia, policy advisory and economic research. He currently serves as a Professor of Economics and director of the Economic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia, Sunway University. Yeah also holds several notable positions, including president of the Malaysian Economic Association, trustee of the Malaysia Tax Research Foundation, and member of the National Consumer Advisory Council at the Ministry of Domestic Trade and Consumer Affairs. In April 2025, he was appointed as an adviser in the Policy Advisory Committee to the Prime Minister.

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