December Poll Finds Rebound In Director Optimism For 2023  

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As inflation continues to cool, corporate board members’ forecasts for the future of the economy are improving.

There may be a recession coming in the year ahead, but it won’t be long and it won’t be too painful, at least according to a new poll of America’s public company director community. And by this time next year, it should be over and the economy will be well on its way to recovery in 2024.

Directors now forecast business conditions in December 2023 to stand at a 5.6 out of 10, according to the December Director Confidence Index, our monthly sentiment poll conducted in partnership with the Diligent Institute. Fielded between December 5-9, the readout from responses by 232 U.S. public company board members, is a welcome change from the majority of the year that was in decline—much like CEOs’ rating.

In October, directors forecast for business conditions 12 months from now dropped below a 5/10 —into ‘weak’ territory on our scale. It was the lowest rating since we began fielding the Director Confidence Index  matched only by the pessimism we saw among CEOs’ forecasts in the perilous days of 2009.

Directors’ rating of current business conditions also ticked up in December to 5.8 from 5.5, as measured on a 10-point scale where 1 is Poor and 10 is Excellent. This is the first gain we’ve seen in directors’ rating of current business conditions since July.

Despite the gains across multiple measures this month, directors’ December forecast still tracks 13 percent below their forecast in January of this year and 12 percent below their forecast in December 2021. Directors share that their forecast is driven by a likely recession both  domestically and globally in the first half of 2023, amid what they see as poor political leadership and dwindling consumer spending power in the face of continued rate hikes by the U.S. Federal Reserve.

Diligent Institute’s Corporate Sentiment Tracker, and AI-based tool monitoring the issues corporate leaders are speaking about most frequently in the news, and whether they are speaking about those topics in a positive or a negative way, sees similar trends.  “Economic Risk” is the top ESG topic being discussed in the last two weeks, according to Diligent, and the top single term being used is “recession.” In the last 90 days, the top term is “inflation.”

Still, a higher proportion of directors are now forecasting improving conditions compared to October, up to 37 percent from 26 percent. This is highest proportion predicting improvement since January of this year. Overall, some 44 percent of directors now believe that conditions will worsen over the coming year—down from 52 percent in October.

“There is ongoing concern about elevated inflation but is balanced by apparently resilient labor markets,” says Peter Bain, independent director at Virtus Investment Partners. “The key tipping point will be whether the Fed can keep rates high enough to ultimately bring down inflation without enabling too deep of a recession.” Still, he says he believes conditions will improve in the months ahead.

“China is beginning to deal with reality of their zero COVID policy (i.e., it is too disruptive and not sustainable long-term). I expect interest rates and inflation to level off, too. And, although cannot see clear off-ramp just yet, I’m expecting the Russia/Ukraine war to show positive signs of concluding without growing into a larger conflict,” says the director at a large medical device company.

Not everyone agrees. Tom Bell, independent director at Norfolk Southern in the industrials sector believes that conditions will deteriorate further due to “Inflation, labor cost and shortage, ineffective government at federal level, poor policy making and regulatory interference.”

Jeffery Yingling, co-founder and investment committee chair at Energy Capital Ventures is in the same camp. “There is an elevated risk of recession due to high energy prices and wage pressures, leading to high inflation,” he says.


Directors’ forecasts for what will come in the year ahead have all improved since our last poll. A higher proportion of directors have grown more optimistic when discussing demand. The same proportion (47 percent) as last month say that consumer demand is up today from the beginning of the year, but the proportion forecasting demand to be up one year from now climbed from 32 percent in October to 41 percent this month.

A majority of directors now forecast that profits will increase in the coming year, up 12 percent since October to 55 percent. Similarly, 60 percent of directors expect revenues to climb, an increase of 3.2 percent since October.

The proportion of directors forecasting increases in capital expenditures has reached its highest level since April of this year—at 36 percent.

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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