Director Optimism Hits 2-Year High In June

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More than half of directors polled now believe that if a recession does still happen in the U.S. this year, it will be mild and short-lived.

If you had asked public company board members a year ago what they were expecting business conditions to look like by the summer of 2023, very few would have painted a bright picture.

In fact, when we did ask them, in June 2022, to forecast business conditions for June 2023, the 185 directors we polled said they expected them to be at 5.2 out of 10 (on a scale where 10 is Excellent and 1 is Poor)—barely out of “Weak” territory according to our scale.

So much for crystal balls. The 132 board members polled June 20-21 said they found current business conditions to rank at 6.4 out of 10—22 percent better than what had been predicted last year.

And when we asked them to forecast conditions for next year, by June 2024, they said they expected business conditions to be at 6.5—not a significant increase from where we are today, but an improvement nonetheless.

So, what happened?

Directors’ optimism for the business environment in the U.S. has been on the rise for three consecutive months, according to our monthly survey of U.S. public company board members conducted in partnership with the Diligent Institute.

At 6.5, the leading indicator is up another 4 percent since May on the back of what polled board members say is slowing inflation, improved supply chains and a persistently confident U.S. consumer in spite of everything, including the threat of a recession (more on that below). Our index is now at the highest level it has been since August 2021—and 11 percent higher than where it was in March, at the time of the bank crisis.

“Inflation will be under control. Interest rates will stop increasing,” Adam Crescenzi, founder of Simply Tuscan Imports and a member of the board of Clough Global Opportunities Fund, said, explaining his increasingly optimistic outlook for where the economy will be this time next year. “Housing market for first-time buyers and second homes will grow. And the consumer will start spending again.”

This aligns to findings out of the Corporate Sentiment Tracker, Diligent Institute’s AI-powered tool tracking the topics corporate leaders are discussing the most frequently in the news. At the time this article is being written, economic risk and inflation are among the top topics.

A Caveat

It’s important to note that the improving outlook for the year ahead doesn’t necessarily mean directors expect conditions to, ironically, improve. In fact, the proportion of directors who forecast an improvement in business conditions by this time next year stayed relatively flat in June (38 percent vs. 37 percent in May).

What we’re observing is the change in the proportion of those forecasting deteriorating conditions. That number declined 10 percentage points in June, to 32 percent (vs. 42 percent in May). Instead, 31 percent now expect more of a status quo (from 41 percent in May).

The main reason for this change of heart is that 54 percent of the directors polled now believe that while a recession may still happen in the U.S. this year, they expect it to be mild and short-lived. The Fed’s pause—even if temporary—the slowing of inflation, a healthy U.S. consumer and the resilience of businesses are the reasons directors expect a soft landing.

Still, there is caution, and 57 percent say the near-term trajectory of the U.S. economy continues to represent a significant risk to them. To mitigate that risk, nearly two-thirds of those polled said their companies had reduced expenditures, and 53 percent said they had optimized their cash flow and reduced debt.

This month, we also asked board members to share their perspectives on the current risk environment, beyond the economy:

• Forty-two percent said the current regulatory environment was significantly affecting their company’s growth and operations, vs. 36 percent who said it had “somewhat” of an impact. Only 22 percent said it had little to no impact.

• The global economy, the geopolitical scene and the U.S.’s political and social environment are all important risk factors for boards and their companies, according to the survey, though the level of risk was marked as moderate for the majority of respondents (50, 50, 49 and 44 percent, respectively).

• Less than a third considered third-party risk a “significant” risk for their company, though 53 percent said vendors carried “some” risk, mainly in terms of cybersecurity.


Overall, while there was an uptick in the proportion of directors who say they expect revenues and profits to increase over the next 12 months, the numbers are trailing their earlier spring highs, at 58 and 65 percent, vs. 62 and 69 percent in April and 55 and 60 percent in May.

And despite 61 percent saying their company had reduced expenditures to help mitigate economic risk, the proportion of directors who said their companies still plan to increase capital expenditures in the next 12 months rose to 35 percent, from 36 percent the month prior. That’s back in line with April levels and the highest it’s been all year.


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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