Close Close

Portfolio > Economy & Markets > Economic Trends

New Board Confidence Index: ‘Barely Optimistic’ About Economy

Your article was successfully shared with the contacts you provided.

A new index that debuted Thursday measures the confidence of company executives in a way that, according to the index’s originators, “provides the view projected through a boardroom lens for the first time.” The National Association of Corporate Directors (NACD) Board Confidence Index, presented by Heidrick & Struggles International, Inc., in conjunction with Pearl Meyer & Partners, indicates that the 155 directors of public companies who responded to the survey came in at a confidence level of 56.6, just above the midpoint.

According to Heidrick & Struggles, Theodore Dysart, managing partner, believes that a view of how public company board directors are feeling is essential in order to track trends that could indicate future economic activity. "At the end of the day, even the CEO has to go to the board to deploy capital and make an investment," Dysart said in a statement. "Over time, the Board Confidence Index should become a leading indicator of what's to come in other economic indicators. The decisions on where and how companies allocate capital begin in the boardroom."

The study showed that 72% of directors believe general economic conditions are better than they were one year ago. But in comparison with the second quarter of 2010, 43% felt that current conditions had not improved; 31% were uncertain about any improvement.

The NACD Board Confidence Index is designed to reflect the growing influence of boards on corporate strategy, performance, and risk management, as well as on capital spending, employment and hiring, and growth. More information about the study is available at NACD’s website.