Director confidence hits record low: Here’s what you can do now
This article originally appeared in our April 17 edition of the Diligent Minute Newsletter. For more insights like these, delivered straight to your inbox, subscribe here.
The March 2025 Director Confidence Index conducted in partnership with Corporate Board Member paints a gloomy picture of the current sentiment among U.S. public company directors as compared to the start of the year. Confidence in both current and future business conditions has fallen to an all-time low since the Index’s inception in 2020 during the COVID-19 pandemic.
Directors rated present conditions at an average of 4.7 out of 10, and their outlook for the year ahead dropped slightly to 4.6 out of 10. These figures represent significant declines of 30% and 33%, respectively, from the optimism seen just three months ago in the post-election climate.
Key findings:
- Economic uncertainty: 60% of surveyed directors anticipate a U.S. recession within the next six months, and 41% expect conditions to worsen over the next year.
- Strategic shifts: While 56% of directors report their companies are maintaining growth strategies, nearly one-third (31%) have adopted a more cautious, wait-and-see approach due to ongoing volatility.
Navigating uncertainty: Impacts on governance and strategy
The latest Director Confidence Index findings highlight a challenging landscape for corporate directors and others in the GRC space. As confidence levels and economic conditions shift, these leaders must adapt their strategies and tools to help their organizations weather the storm.
Here’s what you can do now:
- Ensure a robust risk identification process for greater resilience: Boards will rely heavily on management to identify risks that could disrupt long-term plans or lead to compliance vulnerabilities. Refining processes for assessing risk tolerance and building resilience into governance structures is crucial.
- Provide directors with real-time, actionable insights: Boards will demand comprehensive yet digestible data to illuminate emerging risks and keep both strategy and compliance efforts aligned with evolving realities. Technology, particularly AI-powered analytics, can centralize critical information, streamline reporting, and offer proactive alerts about vulnerabilities.
- Conduct scenario planning: The wait-and-see approach adopted by many boards signals a need for scenario-based risk assessments. By modeling a range of geopolitical and economic outcomes and their potential impacts, boards can evaluate their strategies under various circumstances, reducing the likelihood of costly missteps.
- Reduce organizational silos and encourage clear communication around risk and compliance: Regulatory scrutiny is likely to continue shifting even as economic pressures mount. Governance professionals must emphasize transparency and disclosure, ensuring that the company’s strategy is clear to shareholders, investors and other stakeholders as the environment continues to evolve. Proactive communication about risk management and strategy will be essential in maintaining trust and minimizing reputational risk.
- Foster agility through learning: Today’s challenges demand a commitment to continuous learning and adaptability. Organizations can support educational initiatives that deepen board members’ understanding of emerging risks, such as cybersecurity threats, AI ethics and human capital strategy. Staying informed means better, more confident decisions in the face of uncertainty.
While economic turbulence and declining confidence levels present clear challenges, they also offer opportunities for those in governance roles to demonstrate their value as strategic partners to the business. By leveraging advanced tools, promoting transparency, and embedding resilience into governance practices, these leaders can help organizations not only navigate volatility but emerge stronger and better equipped for future growth.
Stay ahead of the challenges and opportunities by diving deeper into the insights revealed by the March 2025 Director Confidence Index.
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