Business confidence across America’s boardrooms plummeted in the first quarter of 2025, falling more than 30 percent since the start of the year.
According to Corporate Board Member’s Director Confidence Index, a quarterly poll of public company board members conducted in partnership with Diligent Institute, the Index hit its lowest level since its inception in 2020.
To calculate the Index, directors are asked to rate their assessment of current business conditions on a 1-10 scale, where 1 is Poor and 10 is Excellent, and provide a forecast for what they believe conditions will look like 12 months out.
In the latest survey conducted the week of March 17, the average rating given to current conditions was 4.7 out of 10, and forecasts for what conditions will be by this time next year ranked at 4.6/10. Those ratings are 30 percent and 33 percent lower, respectively, than they were in the post-election business environment last December, when the news of a business-friendly incoming administration drove optimism for the year ahead.
This is a significant downturn, according to the Index’s historical data dating back to Q3 of 2020. The biggest movement recorded during those five years had so far been half that size—a decline of 15 percent in September 2023 that was then caused by renewed concerns over the likelihood of a recession related to the Fed’s policy.
At the time, we wrote, “Directors polled said despite healthy economic indicators and continuously strong demand, for most sectors, the number of uncertainties in the current environment is making it nearly impossible to tell what’s around the corner—and whether a recession is imminent.”
Looking at the March data, things are looking eerily similar: 60 percent of the 145 board members polled in March forecast a recession or slowdown within six months—though the focus isn’t so much on the Fed this time around.
Instead, directors now have their eyes toward the White House. When asked to explain their forecasts, 9 out of 10 directors mentioned political uncertainty, and half cited tariffs or trade policies.
“Tariffs, deportations and chaos causing inflation, labor shortages and confusion where to invest,” said Bill Korn, a director who has served on several boards, including Jerash Holdings and CareCloud.
“Things could be very good but given uncertainty on so many fronts, don’t see things improving in one year’s time,” echoed a seasoned director in the consumer sector.
Still, some are hopeful this is all temporary.
“The current trade uncertainty will temporarily slow the U.S. economy in 2025, while 2026 will likely deliver more growth and profits,” said Ari Papoulias, who serves on the board of United-Guardian.
A number of directors echoed the belief that this volatility should be short-lived: “The administration should be achieving more of the longer term goals, and the markets and current volatility should have settled down [one year from now],” explained one such director who expects business conditions to improve to a 7 out of 10 from its current 5/10 over the next 12 months.
For now, however, 41 percent of directors polled expect conditions to deteriorate further over the coming months vs. 36 percent who forecast improvements.
SECTOR VARIANCES
Some sectors are more optimistic than others, according to the March Director Confidence Index data. Technology, for instance: 33 percent of directors in that sector expect a growing economy within the next six months.
Meanwhile, more oil and gas board members expect a severe recession over that same period (13 percent) than in any other sector.
None of the forecasts for the year ahead reveal expectations of a stellar landscape for business, with the most optimistic of the bunch, tech directors, expecting conditions to rank 5.3 out of 10—barely into “good” territory according to the scale labels.
At the opposite end of the scale, directors in the real estate, hospitality and construction returned the lowest expected rating, 3.8 out of 10.
THE YEAR AHEAD
Most public company board members have experienced leading in times of great disruption—and many bring valuable advice to today’s leadership teams. Among them: Stay the course and avoid short-term kneejerk reactions.
Fifty-six percent of those polled said that despite the turbulence, they are sticking to their growth strategy—and 8 percent said they are doubling down on growth, thanks to new opportunities arising. Overall, only 31 percent said the current environment had required them to take a pause.
Perhaps with one caveat: “Stay the course but revisit the forecasts,” said one director participating in the poll.
When it comes to forecasting revenues for the 12 months ahead, only 69 percent of directors now expect to see them increase this year (down from 82 percent at the start of the year).
Sixty-three percent expect profitability to be up, vs. 80 percent who said the same in our last poll.
And less than a third (32 percent) plan to increase capital expenditures this year, vs. 45 percent who had projected increases at the start of the year.
Here, too, we see variations by sector, as can be expected. For instance, the data shows much greater optimism for improving revenue and profitability in the consumer and financial services sectors, compared to others.
And those in the mining & metals or life sciences sectors had a greater number of directors indicating their companies were decreasing capex this year, vs. other sectors.
Participants in the survey receive a more in-depth look into the sector variances. If you wish to obtain details on a particular data point, please send your request to research@chiefexecutivegroup.com.
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.
