Directors Predict Mild Recession And Higher Rates In 2023 In New Survey

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Dow 32,000? Inflation calming? End of conflict in the Ukraine? DeSantis as front runner? We asked America’s boardroom members for their best predictions about the coming year. Here’s what they foresee.

I’d place a wager that no one wants to relive 2022. From a war in Europe to record-high inflation and soaring interest rates, most didn’t plan for—or expect—all the cards we were delt over the past 12 months. In order to get a better read on the road ahead, we asked America’s corporate directors to share their best calls for 2023. Here’s what they had to say.

The Stock Market

Almost a majority of directors (48 percent) expect the Dow Jones Industrial Average to end 2023 within the 30,000 to 35,000 range—not too far below its level today—but many also predict the benchmark could rise. Over one third of respondents expect the Dow to end next year above current levels, while only 16 percent expect the market to decline further.

“There’s a declining stock market conditions and lack of capital for trading,” says Gust Kepler, chairman at Blackbox Stocks, an analytics company for stocks and options traders. “The declining market conditions coupled with inflation and lowered discretionary consumer spending has greatly impacted growth and stability.”

Inflation & The Economy

The economy hit many unfortunate records in 2022 and business leaders and consumers alike are keeping a close eye on where inflation and interest rates will go in the coming year. Both measures are indicators of the overall health of the economy and business environment and are a main driver of directors’, CEOs’ and CFOs’ outlooks in our confidence index series.

According to our recent polling, 72 percent of directors expect inflation to gradually subside over the coming 12 months, after hitting a historic peak the previous 12 months. An additional 20 percent expect inflation to remain where it is now, and a doubtful 6 percent expect it to get worse. Only 1 percent expect inflation to decline rapidly, and no directors we polled expect it to get much worse.

“Inflation is impacting consumer buying – but the softening has so far been less than some had feared. I have a feeling that inflation will moderate,” says the director of a mid-size consumer manufacturing and industrials company.

“Inflation will likely subside, and supply chain issues will generally get worked out,” says Scott Pancoast, CEO, Founder and Board Member at Zylo Therapeutics, a pharmaceutical research company.

“High inflation takes time to tame. Our government has to first recognize we have a high inflation level and then take steps to modify its behavior that feeds inflation.  There is still an underlying strength in our economy, and it needs fine tuning to continue to improve,” says the independent director at a small, diversified manufacturing corporation.

When asked about the trajectory of interest rates, two out of three directors say the Fed Funds/Prime rate will end 2023 between 4.5% and 5.5%, up from 3.83 percent in December 2022. Only 2 percent of directors expect the rate to drop by the end of next year, but 14 percent expect that it could climb above 5.5%.

“I have concerns over recession in early 2023 and continued interest rate hikes by the Fed,” says Gary LeDonne, independent director at MVB Financial.

“There is ongoing concern about elevated inflation, balanced by apparently resilient labor markets. 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,” says Peter Bain, independent director at Virtus Investment Partners.

Only one third and 40 percent, respectively, predicted even hints of a recession when we polled CEOs and CFOs on their predictions about 2022 in December of the previous year. This year however, 81 percent of directors we polled expect to spend at least part of the year in a recession. Luckily, the vast majority of those who foresee a recession foresee only a mild or short-lived recession.

“We are expecting inflation to fall (good) but there will be some offsetting recessionary forces that may impede demand/growth (bad),” says the director at a large consumer staples company.

“Expectation of continuing increase in interest rates leading to domestic recession, a likely recession in existence already and economic downturns in China,” says the director of a large financials company.

Many other board members in financials agree, stating that they expect a mild recession in 2023.


Ongoing unrest in China is bringing attention back to their zero-Covid policy and Xi Jinping’s stronghold on the government of the powerhouse nation. As Covid spikes and their economy dips many wonder if it’s possible for the nation’s leadership to change. That’s something we can’t answer for sure—but we can say that 97 percent of U.S. corporate directors believe it is unlikely. Only 3 percent of directors think that Xi will either hold a title other than president or be ousted by this time next year.

We also asked directors to share their forecast for where the Russia/Ukraine war would be in December, 2023. Some 63 percent of directors forecast a continued slog, meaning that fighting will continue, and Russia will hold on to territory. Almost a quarter of directors (24 percent) predict a brokered halt, such as a cease-fire or negotiated peace agreement. Only 1 percent of directors say that the use of nuclear weapons could come into play.

“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 of a large medical equipment manufacturer.

“I believe Putin will sustain war efforts in Ukraine, which will continue global supply chain disruptions that hurt the world economy, including the U.S.,” says the director at a small financials company.

The Race for President

Finally, we wanted to get an early look at your take on the upcoming presidential election, and we found 60 percent of directors in our poll thought Ron DeSantis will have the best odds of most likely next U.S. president as of December 2023—at least according to bookmakers. Another 26 percent think it will be Joe Biden.  

Only one percent of directors believe that Mike Pence or Donald Trump will have the best odds of becoming president at this time next year.

 “Trump will fade given all of his legal challenges, warranted or not,” says the director at a midsize company in the consumer discretionary sector. “The Republicans will have a large field.”

For those keeping score, UK betting platform Ladbrokes most recently listed odds of DeSantis at 21-10 or a 32.3 percent probability of being the next president, followed by Biden at 3-1 or 25 percent probability. Trump was third, at 11-2 odds or 15.4 percent. Pence was a longshot to even get the GOP nomination, with 20-1 odds for getting his party’s nod, about the same as Virginia’s governor, Glenn Youngkin.

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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