Director Optimism Climbs To Highest Level In Two Years

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Latest survey reveals heightened optimism that the worst is now behind us, as directors bet on stabilizing conditions to permeate business in the months ahead.

It wasn’t a surprise for anyone, and yet the Fed’s announcement to raise interest rates by another quarter point on Wednesday drove a wave of renewed optimism among public company board members.

Corporate Board Member’s Director Confidence Index for July, conducted in partnership with Diligent Institute, finds directors’ outlook back up to levels unseen since July 2021. Prior to the announcement, directors polled had assessed their forecast for business 12 months out at 6.3 out of 10 (measured on a 10-point scale where 10 is Excellent and 1 is Poor). Post-announcement? The average rating climbed to 7.1, bringing the Index to 6.8 overall.

At that level, our forward-looking indicator is up another 5 percent since June. It is the sixth increase recorded this year (with only one loss observed in March), which is putting the Index 14 percent higher than where it started the year—and 25 percent higher than where it was at this time last year.

Directors’ assessment of current business conditions is up at 6.8 as well. That’s an uptick of 6 percent from the prior month and the highest level since February 2022.

The most cited factor for the optimism is the idea that inflation is slowing and that the Fed may have reached the end of its tightening strategy. Many also said demand has persisted through the increases in interest rates, while supply chains have stabilized and the probability of a recession is now negligible.

“After a 25 BP rate increase in September, the Fed will begin to lower the interest rate in the second quarter; the economy will begin to rebound in the second half the year,” forecasted Gaylyn Finn, who serves on the board of SB Financial Group.

Several others echoed the prediction, though at this point, fewer directors expect conditions to continue improving in the months ahead (34 percent in July vs. 37 percent in June). Rather, 37 percent now say conditions are more likely to level off (vs. 32 percent in June) from here on out.

“Not much will happen until after the 2024 election,” said Tony Levecchio, executive chair of cybersecurity company Intrusion.

He isn’t alone in expecting next year’s election to add renewed volatility and uncertainty to the mix. Many others echoed the sentiment in this month’s poll.

“There’s too much uncertainty,” said a fellow director who serves on the board of a large REIT. “While I believe interest rates will likely start to come down in early 2024, the current economic and political uncertainty will put fear into the marketplace, I believe.”


As has been the case for the past few years, sector plays a key part in determining the level of optimism among board members. In July, our data shows healthcare directors as most confident in their outlook, forecasting conditions for business 12 months from now to be 7.3 out of 10.

Not far behind are directors in the industrials sector (7.2/10) and financial services directors (7.1)—the only two other groups where the outlook exceeds the average across sectors.

Board members in the technology sector were on par with the average, predicting conditions to be 6.8 out of 10 by this time next year.

At the other end of the scale, REIT directors offered the lowest forecast, 5.6/10, followed by directors in the consumer staples sector (6.0) and energy directors (6.2).

One director in the real estate space said expectations for a quick recovery in the industry are low. “Interest rates are hampering growth and investment. Companies make capital allocation decisions a year or more out, so this will not turn around quickly if the economy starts to recover.”

For those in the energy sector, one director said, to explain his forecast for flat conditions in the months ahead: “Continued government overreach is having a negative impact, costing more money, creating tail-chasing for no reason, driving up insurance and hindering valuations.”


The Fed’s rate hike may have bolstered directors’ outlook, but it is nevertheless impacting bottom lines. The proportion of directors expecting profitability to be up by this time next year decreased by 2 percent in July, to 58 percent, as an increasing number of board members say they’re expecting profits to flatten out. A lesser proportion than in June, however, are now expecting profits to continue to shrink.

When it comes to revenue forecasts, fully two-thirds of directors are expecting revenues to continue rising (fairly unchanged since June)—30 percent of whom expect the increase to be in the double digits.

The data shows no sizeable change in capital expenditures over the next 12 months, with a majority saying their company doesn’t plan to make any changes on that front.

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 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

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