Boardroom Outlook For 2023 Grows Darker In May

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Directors continue to downgrade their rating of future business conditions this month after a nosedive in April.

Directors’ list of concerns grew longer in May, with their rating of future conditions down another 2 percent. This comes after a 9 percent plummet in April, which sent the index below a rating of 6 or “good” for the first time.

Our May Director Confidence Index, a poll of 176 U.S. public company directors, conducted May 16-20 in partnership with the Diligent Institute, fell to 5.6/10. That’s a new low since we started the index in 2020 and is 22 percent worse than their outlook at this time one year ago. 

Directors say supply chain issues are causing damaging effects to business and they don’t expect them to improve in the near term. Rising interest rates amid record high price increases will continue to cause obstacles for businesses, according to directors, especially as hiring remains a challenge.

These findings continue to align with Diligent Institute’s Corporate Sentiment Tracker, an AI-powered tool which tracks the issues corporate leaders are speaking about most frequently in the news and whether they’re speaking about those issues in a positive or a negative way. At the time this report is being written, overall, the top terms being discussed in the last 14 days are “inflation,” “recession,” and “future,” in that order. Meanwhile, “geopolitical risk” has crept into the top three ESG topics being discussed, behind “economic risk” and “biorisk.”

“Inflation, the supply chain, employees expecting more flexibility and higher pay in the midst of rising costs. Money is getting expensive. Taxes are higher,” lists Lili Gil Valletta, independent director at Zumiez, in the consumer discretionary sector. She expects conditions to plummet over the next 12 months, rating the future environment as 4/10, down from her 7/10 rating of current conditions.

“There’s runaway fuel prices and the Fed is in position to continue to raise interest rates. We are also facing price escalation caused by the supply chain backlog,” says Adam Crescenzi, vice chair at Clough Global Closed End Funds. He adds that the war in Ukraine is another reason why he expects business conditions to deteriorate from 6/10 to 5/10. 

Other directors also cite geopolitical issues to explain their rating, voicing troubles over the continued impacts of the war in Ukraine and volatility in China. They are concerned with domestic political instability as well as the federal government’s decisions regarding the economy and the regulatory environment.

Gary D Blackford, board chair at Avanos, a medical technology company, says his dismal 1/10 rating of both current and future conditions is fueled by, “Extremely excessive government regulation, a hostile business environment from the current Administration coupled with supply chain problems and persistent inflations.”

“Policies that are causing inflation in many key sectors of the economy and increased regulations are discouraging investment. More investment will be driven off-shore,” says James Treco, lead director at Tonix Pharmaceutical to explain his 4/10 rating of future business conditions.

Director sentiment surrounding current business conditions fell 7 percent in May, to 6.1/10, down from 6.6/10 last month. This is 12 percent below their rating of current conditions last year and the lowest the index has hit since January of 2021, before vaccines became widely available and Covid-19 mandates were at a high.  

Director sentiment is aligned with that of CEOs, who are polled in a similar CEO Confidence Index by our sister publication, Chief Executive. CEOs’ read on future conditions fell 3 percent in May, after a 9 percent drop in April and now reads 5.9/6. This is the lowest rating in almost 6 years. Their rating of current business conditions fell by 3 percent, as well, to 6.4/10, in May. Both measures are still slightly more optimistic than directors’ but are losing ground at similar paces.

In May, more directors are now expecting conditions to improve, at 25 percent—compared to only 17 percent in April. Many directors now rate current conditions as lower than future conditions and other are hopeful for positive change, boosting their rating of future conditions.

“Shocks of war and higher prices [are] having a heavy impact, but I expect adjusting to those conditions will resolve themselves within the next 12 months,” an outside director in consumer staples who expects conditions to improve to 8/10 from 7/10 today.

Other directors who forecast improving conditions also share that inflation and rising costs will ease as the supply responds to increased demand for products and services.

Still, the majority of directors—55 percent—forecast worsening conditions due to supply constraints, inflation, rising energy costs and the high likelihood of a recession in the near or mid-term.

“There is exceptionally high inflation, continued supply chain challenges and shortages of key components, geopolitical tensions exacerbating these conditions, all of which increases the likelihood of a consumer recession later this year,” says one director at an industrial company, explaining why he expects conditions to further deteriorate.

Twenty percent of the directors we polled directors expect conditions to remain unchanged. Bill Korn, director at Jerash Holdings (US) Ltd., is not seeing the supply constraints many others are. “There is strong supply. Others may be constrained by availability, but both the company where I am CFO and the two where I am outside director have offshore offices, with plenty of availability of talented people,” echoing other directors’ assessments that things are better offshore. He rates both current and future business conditions as 9/10.

Dickerson Wright, chair at NV5 Global, in the utilities sector is at the optimistic end of the spectrum rating both future and current conditions 8/10. Why? He says, “There is expansion in energy and energy alternatives. Also there is an increased focus on infrastructure improvement.”


For the second consecutive month, the proportion of directors forecasting increases in profits and revenues fell in May. Now, 61 percent of directors forecast increases in profits, down 13 percent since April. 71 percent of director forecast an increase in revenues, down 4 percent since last month.

Both readings are in-line with those of CEOs, of whom 58 percent forecast increases in profits and 70 percent who say the same for revenues. May is the fourth consecutive month that the proportion of CEOs forecasting increases in profits and revenues fell.

The proportion of directors forecasting increases in capital expenditures fell by 25 percent in May, down from 45 percent in April to 34 percent. This proportion is far behind the proportion of CEOs and CFOs who plan the same, at 52 and 42 percent, respectively.

About the Director Confidence Index

The Director Confidence Index is a monthly survey of public company board members on the state of the overall economy, the outlook for business and other topical issues impacting public companies. Conducted in collaboration between Corporate Board Member and Diligent Institute, the Index benchmarks confidence among the governance community and is a forward-looking indicator of market movements and corporate strategies.

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 is the corporate governance research arm and think tank of Diligent Corporation. The Institute produces publicly available cutting-edge research on corporate governance practices by directors, for directors, with a global perspective. Learn more at

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