Director Optimism Hits New Low In September

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Corporate Board Member’s September reading of director sentiment shows optimism waning, as companies continue to grapple with unresolved challenges and lingering uncertainties.

You can add optimism to the list of things in short supply these days—at least in America’s boardrooms.  

That’s the big takeaway from our most recent Director Confidence Index, a flash poll of 152 public company board members conducted in partnership between Corporate Board Member and Diligent Institute. Directors say increasing regulations, inflation, rising interest rates, supply chain disruptions and the toxic political climate are all giving them pause about where we’ll be economically in 2022—and doing so to an extent not seen since before the rollout of the Covid-19 vaccines. 

In our September survey, directors’ forecast for business conditions 12 months from now fell to 6.5 out of 10, down 3.5 percent since August. That’s more than 12 percent off April highs (7.5) and the lowest our leading indicator has been since we started to track director sentiment a year ago.   

Directors’ assessment of current business conditions also declined in September, to 6.44 out of 10, on our 10-point scale. That is nearly 6 percent lower than in August and 13 percent off July highs, when board members and many members of the C-Suite forecasted a return to the office and the tampering of pandemic conditions. 

“We may be riding a wave of pent-up demand, but the looming shortages (people, materials, etc.) and fractured government do not bode well for the future,” says Jane Sadowsky, director at precious metals producer Yamana Gold, echoing general sentiment among many survey respondents. “As we enter winter in the U.S., another wave of Covid could devastate morale and business conditions.” She rates current conditions a 6 out of 10 but forecasts them to decline to a 4 by October 2022. 

This is in line with findings out of Diligent Institute’s Corporate Sentiment Tracker, an AI-powered tool which tracks issues being discussed by corporate leaders in the news and whether they are speaking about those issues positively or negatively. At the time this report is being written, the Corporate Sentiment Tracker is 58% positive, down from 66% last month. 

“I think business is doing well in many industries but could be held back by five points—Covid, supply chain disruptions, interest rates, Congress/Senate success on new bills, raising the debt limit and ability to hire employees,” says Merrie Frankel, director at Agree Realty Corporation, a retail net lease REIT where she chairs the nominating/governance committee. 

For Carlos Palomares, chair of a diversified consumer finance company Regional Management Corporation, says he forecasts a slight dip in the business environment—from a 6 out of 10 to a 5—due to “risk that inflation may be worse and of longer duration that most expect,” he says, adding that “political disfunction” is also impacting his outlook. 

“Business conditions are actually very good. Consumers are spending money, there are backlogs all over the place which will keep manufacturing going for a long time, interest rates are low, etc.,” says the director of a publicly traded company in the financials sector. Yet, he rates conditions a 5/10, which he says is because of “the risk is that the government (Democrats) will screw it up with a lot of unnecessary stimulus and new taxes that will put the brakes on.” 

Most directors—even those with “excellent” or “very good” forecasts—are keeping a close eye on how things unfold across many areas. For Henry Nasella, lead director at apparel company PVH Corporation, who rates current business conditions a 9 out of 10 and expects them to remain as strong throughout the year, the “current momentum is very strong globally and expect these trends to continue. The biggest risks for us are geopolitical and not under our control,” he says. 

Some, still, remain very optimistic in the future: “Logistics issue of supply will be resolved in six months. The financial markets will continue to be positive. And the infrastructure will be passed although reduced to under 3Trillion,” forecasts Adam Crescenzi, director at Clough Global Allocation Fund. He rates current conditions a 7 out of 10 and expect to improve to a 9—or “excellent” on our scale—by this time next year. 

Overall, 38 percent of directors forecast conditions to improve by October 2022, compared to 36 percent who forecast declines—and 26 percent predicting the status quo. 

Still, that is slightly more optimistic than CEOs’ forecasts, which continued to decline in early October. According to our sister publication Chief Executive’s latest polling, 33 percent of CEOs expect conditions to improve in 2022, compared to 35 percent who project they will worsen—31 percent now say they will remain unchanged. 

The Year Ahead 

The proportion of directors forecasting increases in revenues and profits declined in September, by 9 and 7 percent to 85 and 77 percent (vs. 92 and 84 percent in August). Those are the lowest levels since January 2021—pre-vaccine efforts in the U.S. 

Nevertheless, an increasing number of directors say their companies are planning to increase capital expenditures over the next 12 months, 56 percent vs. 52 percent in August. While a 7 percent increase, this proportion remains one of the lowest on record this 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 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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