Boards brace for 2026: Confidence rebounds, risk looms
This article originally appeared in our January 15th edition of the Diligent Minute Newsletter. For more insights like these, delivered straight to your inbox, subscribe here.
After three quarters of near-record low confidence levels, America’s boardrooms ended 2025 on a surprisingly hopeful note, even as directors brace for another demanding year. The latest Director Confidence Index, our quarterly survey of U.S. public company directors conducted with Corporate Board Member, shows sentiment rebounding sharply after three consecutive quarters at a five-year low throughout much of last year.
Why U.S. board confidence rebounded at the end of 2025
Confidence rose 23% in the final month of the year, climbing from 4.9 to 6.0 on a 10-point scale and finally nudging back into what respondents consider “good” territory. As a key driver behind the shift, directors point to:
- A clearer view of tariff impacts
- Lower interest rates
- Renewed capital investment
In other words, after a year of policy whiplash, boards feel they at least understand the playing field a bit better - even if they don’t like it.
That late-year rally, however, shouldn’t be mistaken for a victory lap. For 2025 overall, average confidence registered just 5.0, well below 2024’s 6.2 and far short of the 6.9 directors had forecast a year ago.
Three quarters of respondents say tariffs were a primary reason conditions fell short of expectations, far outpacing any other factor. Their comments underscore how hard it is for boards to plan when rules change midgame; familiar playbooks don’t work when trade policy and enforcement shift repeatedly.
Tariffs, uncertainty and a new risk landscape
Directors in sectors long considered resilient, like life sciences, describe this period as unlike anything they’ve seen in decades. Many point to deferred capital spending and elongated decision cycles as companies try to model scenarios that are, frankly, impossible to model with precision. That reality is reshaping how boards think about risk, resilience and the very nature of their oversight role.
Looking ahead, directors are cautious
Their outlook for business conditions by late 2026 is 6.0, essentially flat from today’s reading. CEOs, by contrast, are modestly more upbeat: in a parallel survey by Chief Executive, they project a 6% improvement to 6.4, and 44% say they expect conditions to improve, compared with 32% of directors. That gap is telling. CEOs are closest to near-term operations; boards are increasingly focused on longer-horizons, compounding risks.
Those directors who are optimistic tend to anchor their confidence in AI and innovation, seeing opportunities to transform productivity and reimagine business models. Among those who expect deterioration, concerns skew heavily toward macro and geopolitical risk, with uncertainty emerging as a dominant theme -— on par with inflation for many neutral respondents.
How boards can strengthen oversight and learning in 2026
To navigate 2026, directors emphasize adaptability, deeper engagement and faster learning, recognizing that they must connect dots across technology, regulation and geopolitics more quickly than ever.
5 years of the Director Confidence Index: Tracking a more demanding role
This quarter also marks five years of fielding the Director Confidence Index, and we asked respondents how their roles have evolved since 2020.
Board members say they are spending far more time on risk in a “more complex and faster moving” environment, with cybersecurity, AI, geopolitical shocks, supply-chain integrity and policy volatility now standard agenda items. Many describe a shift from “managing the present” toward future-oriented scenario planning and strategic resilience, alongside heightened scrutiny from investors and activists that expands the mandate beyond financial performance to culture, human capital and corporate character.
Taken together, the picture is clear: being a director today is more time-intensive, strategically demanding and consequential than it was in 2020 and perhaps than it has ever been. One director distilled the 2026 playbook to three words: “Defend and survive.” I would add a fourth: learn. Boards that invest in learning about AI technology, geopolitics, regulation and stakeholder expectations will be best positioned not just to endure whatever comes next, but to help their organizations emerge stronger on the other side.
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