After months of tariff-fueled ups and downs, America’s public company board members appear to have found some emotional equilibrium about the state of the economy—but it’s hardly optimistic.
The latest reading from our Director Confidence Index, a quarterly poll of public company board members in the U.S. conducted by Corporate Board Member and Diligent Institute, finds directors’ perception of the current business environment unchanged since Q2, with little expectation for improvement in the year to come.
Directors rate current conditions at 4.9 out of 10, a modest improvement from last quarter’s 4.4 but still well below the 6.7 optimism they expressed at the end of last year.
Meanwhile, their 12-month forecast holds steady q/q at 4.8 out of 10, suggesting a potential plateau for business, amid the competing Washington forces of tariffs, potential Fed cuts and the OBBB.
“We expect higher inflation, rising unemployment and a possible recession, potentially leading to stagflation,” said one director polled, attributing these events to “ongoing tariffs and other policies of the current administration.”
Others point to nascent signs of increasing unemployment, overvalued stock markets and weakening consumer demand, all of which they attribute to DC decision-making rather than any underlying economic fragility. “Chaos at the federal level making investment decisions riskier,” explained one director, echoing several others who said tariffs and geopolitical uncertainty are impacting consumer behavior as well as corporate strategies.
At the same time, many expect tailwinds from the One Big Beautiful Bill, the influx of foreign investments and the settling of trade agreements, which they say help support business growth. As one director put it: “Stable tax rates, tariffs which are in place and understood, and significant corporate and foreign investment in new plants and services” are driving his optimism.
The likelihood that the Fed will cut rates at their upcoming meeting is also helping curb the negative impact of Washington-imposed headwinds. “I expect tariffs will be settled, interest rates will be lower, and the overall confidence of the consumer will improve,” one director said, explaining her 12-month forecast for business of 6 out of 10.
Overall though, our August poll shows a deep erosion in directors’ outlook, with many more predicting economic conditions will deteriorate in the near term: 37 percent vs. 21 percent in Q2.
Corporate forecasts for the months ahead remain about where they were last quarter:
- 65 percent expect revenues to increase over the next 12 months, unchanged from Q2.
- 56 percent expect profits to increase during that same period, vs. 59 percent in Q2.
- 42 percent plan to increase capital expenditures in that period, vs. 41 percent in Q2.
Against this backdrop, directors say the biggest opportunities for their company can be found in AI adoption (64 percent), with several also finding opportunities in M&A and strategic partnerships (58 percent).
About Corporate Board Member
Corporate Board Member, a division of Chief Executive Group, has been the market leader in board education for 20 years. The quarterly publication provides public company board members, CEOs, general counsel and corporate secretaries decision-making tools to address the wide range of corporate governance, risk oversight and shareholder engagement issues facing their boards. Corporate Board Member further extends its thought leadership through online resources, webinars, timely research, conferences and peer-driven roundtables. The company maintains the most comprehensive database of directors and officers of publicly traded companies listed with NYSE, NYSE Amex and Nasdaq.
About the Diligent Institute
Diligent Institute informs, educates, and connects leaders to champion modern governance. We provide original, cutting-edge research on the most pressing issues in corporate governance; certifications and educational programs that equip leaders with the knowledge and credentials needed to guide their organizations through existential challenges; networks that convene directors and corporate executives to share best practices and insights; and awards and recognition programs that celebrate the accomplishments of those who champion modern governance. Learn more at diligentinstitute.com.
