Directors Split On Future Business Conditions In December Poll

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After pessimistic forecasts in September and October, the final index of the year sees directors up their rating—with caveats.

After a Fall of diminishing expectations for 2024, directors polled by Corporate Board Member say they are growing more optimistic for business conditions 12 months from now. Their ratings—collected as part of our monthly Director Confidence Index survey, conducted in partnership with The Diligent Institute—improved substantially in December, with most pointing to expectations and signals of stable interest rates and inflation by year-end 2024. And that was before the Fed’s announcement this week.  

Directors’ rating of current business conditions grew 6.6 percent this month versus the month prior to 6.4 out of 10—on a 10-point scale where 10=Excellent and 1=Poor, when 123 directors were surveyed on December 3-10. Their rating is the second highest of the year and 9.6 percent higher than their rating in January.  

Director outlook follows a similar trend, with the December index prediction for business conditions 12 months down the line climbing 11 percent from November. Their outlook this month, now at 6.5 out of 10, matches their outlook from June, before the ups-and-downs of the late summer and fall. This rebound is similar to that of CEOs, whose outlook in December climbed 7.5 percent to 6.3 out of 10, after hitting multi-year lows months prior.  

That hardly means agreement on the subject, though. Despite the uptick in the index average, dig a bit deeper and you’ll find directors split into even thirds on the question of whether the economy will deteriorate, remain unchanged or improve in 2024.  

“The labor market uncertainty and rising costs coupled with geopolitical uncertainty and U.S. politics including next year’s presidential election, are elements driving my forecast,” says Lenore Sullivan, a corporate director sitting on multiple boards including PotlatchDeltic Corp. and RREEF America REIT II. She expects conditions to remain unchanged.  

Ari Papoulias, corporate director at United Guardian, agrees that conditions will remain steady. “We are finishing 2023 with high GDP growth, relative strong earnings and signals of ending interest rate hikes,” he says. “Irrespective of how smooth the economic landing is next year, we will go through some volatility to finish 2024 on a high note with some upsides thereafter.”  

The third that expect conditions to deteriorate cite U.S. political chaos, global conflict and continued high inflation, including one independent director at a large financials company who told us that “spending will hit an inflection point and slow down at the business and consumer level,” as the reason she expects conditions will deteriorate.  

Alan Krusi, independent director at Granite Construction, also expects conditions to deteriorate. Why? “Continued federal government turmoil and likely recession in 2024.” 

Still, having a third of directors who expect business conditions to improve is an improvement since last month, when only 29 percent of directors expected conditions would get better versus 44 percent who expected conditions to deteriorate.  

Adam Crescenzi, independent chairman of the board at Simply Tuscan Imports, expects conditions will improve, explaining, “The Fed will hold interest rates. Expect rates to be lower in a year. Therefore, investments in new products and services will drive growth. Also selected companies will profit from acquisitions of those companies who did not transform themselves to the new technology competitive environment.”  

“Inflation and interest rates are declining. This will bode well for the housing industry,” says Larry Sorsby, independent director at a mid-size consumer discretionary company, to explain why he expects conditions to improve. 

The Year Ahead 

When it comes to forecasting for their own businesses in the year ahead, 66 percent of directors now forecast increasing profits over the next 12 months, compared to 63 percent of CEOs according to Chief Executive Group’s latest polling. This was a huge growth in the proportion of positive CEOs since the month prior, when only 47 percent of CEOs projected increases in profits in 2024.  

Projections for revenue growth are also buoyant, with 68 percent of directors and 73 percent of CEOs forecasting increases in revenue over the course of 2024. This represented a 30 increase in the proportion of CEOs forecasting revenue growth MoM.  

Most directors project no change or declines in capex—at 65 percent, with only 35 percent projecting increases over the next 12 months. As for CEOs, 49 percent are now planning increases in capex—one of the highest proportions of the year, on anticipated rate declines.  

Geopolitical Risk 

While well aware of the potential challenges global conflicts and geopolitical turmoil can present, especially for multinational firms, directors so far do not seem to be overly concerned about the impact on their companies for 2024-25. In our annual What Directors Think survey, which will be released in January, directors ranked a variety of other issues above the overall geopolitical landscape or the presidential election when it comes to having the greatest influence on their company’s ability to execute on strategic priorities. 

But of the geopolitical risks facing the world right now, the U.S. election poses the greatest risk, directors said in response to questions in our December Director Confidence Index survey. We asked directors to select two geopolitical challenges from a list and 36 percent of directors selected U.S. election and political uncertainties as one of their top risks, making it the most popular response by almost 20 percentage points. Following that is cybersecurity, at 18 percent.  

“Politics at federal level and state level is increasingly more incompetent. Unable to make positions in favor of the people. More inclined to focus on partisan politics,” says the director of an upper-mid-sized financials company.  

In response to an increased risk environment, 39 percent of directors said they are engaging in scenario planning to evaluate their readiness to a range of outcomes. Following that, 19 percent of directors said they are enlisting the help of experts to navigate changing laws, regulations and requirements.  

Broad uncertainty means boards have to be proactive in discussing impacts under multiple feasible scenarios,” says audit committee member of an upper-mid-sized IT company.  

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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