Director Confidence Index: November 2024
Director optimism soars In post-election survey
The past few years have been marked by significant headwinds for business in the U.S., but if you listen to the hundreds of public company board members who participated in our post-election poll last week, that may be about to change.
Our November Director Confidence Index, conducted in partnership with Corporate Board Member, finds the majority of corporate directors optimistic about the business landscape in 2025: 54 percent expect conditions to improve over the next 12 months, vs. 42 percent in Q3 when we last polled them on this matter.
Directors project the business environment a year from now to hit 7 on a 10-point scale where 1 is Poor and 10 is Excellent—up 10 percent since Q3 and the highest forecast on record since July 2021, when the Covid-19 vaccine rollout gave hope for a return to normal.
When asked to explain their outlook, 95 percent said it had been influenced, to varying degrees, good or bad, by the outcome of the 2024 presidential election.
More specifically, those anticipating that the Trump administration will have a positive effect on business cited the easing of companies’ regulatory requirements and looming tax cuts as the primary reasons for expecting improving conditions, while those forecasting a negative effect on business cited trade tariffs and overall instability as the most common elements driving their forecast.
Looking at the full surveyed population, regardless of their take on the election results, “corporate taxes” ranked first on the list of policies that have the potential to have the biggest impact on business, followed by “industry regulation,” “trade policies” and “climate regulation.”
Many directors, though, found themselves in the middle, voicing both positives and negatives for the year ahead.
“Soft landing seems to have been accomplished. Post election, I anticipate less regulatory scrutiny will improve the economy, but this will be offset by the impact of tariffs and inflation,” said a director on the board of a REIT, echoing several others who mentioned concerns over tariffs.
“I am expecting some puts and takes: better capital environment from lower interest rates, but some higher prices from tariffs in specific imports,” added Autumn Bayles, who serves on the board of QNB Bank.
As Axcelis’ non-executive chair Jorge Titinger put it: “Keep a foot on the accelerator and the other one on the brakes.”
On a macro level, more than three-quarters agree that the Trump administration’s first order of business upon taking office should be to focus on growing the economy—ahead of immigration (59 percent), foreign relations (44 percent) and fiscal policies (32 percent).
CEOs polled Chief Executive during that same period agree with board members on the top three priorities for the incoming administration, but CFOs, when asked the same question by Chief Executive Group community StrategicCFO360, placed taxes in third place on that list—agreeing with directors and CEOs at least on the first two.
The national debt level was also added as a concern by some directors—and we observed a similar write-in response from CEOs and CFOs.
While the data finds a higher proportion of board members who anticipate business conditions to improve, 27 percent disagree and say they instead foresee a deterioration of business conditions in the U.S. That proportion has been relatively steady all year, moving one point up or down every quarter, for an average of 26 percent in 2024.
Those directors say they anticipate significant challenges ahead, such as increased inflation, a tighter labor market and heightening global tensions, which they believe will neutralize the potential positives of tax cuts and deregulation. A word analysis finds “tariffs” among the most cited this month, with 20 percent of directors polled using it in their justification for their outlook.
Overall, though, sentiment has turned positive, and 79 percent expect the effect of the incoming administration to bolster equity markets, though half of them say the gains will be limited.
“The stock market has spiked following the election. It will likely stabilize over the next 12 months,” said MVB Financial’s Gary LeDonne, noting, “Hopefully, most of the initial gains will stick.”
The year ahead
The optimism recorded by our leading indicator in November also translates to individual company forecasts, with 82 percent of those polled saying they expect revenue to rise in 2025 (up 8 percentage points from 74 percent in Q3) and 80 percent expecting profits to increase (up 10 percentage points from 70 percent in Q3).
Additionally, 45 percent said they would increase capex in the months to come, up from 42 percent in Q3—a 9 percent jump and the highest proportion since the spring of 2022.
Directors feel the regulatory strain
August poll finds directors overwhelmed with the U.S. regulatory environment, marking it as a significant detractor from strategy.
Board members seek ERM benchmarking data
Our June poll of U.S. public company directors, conducted with Corporate Board Member, finds enterprise risk taking up more of the board’s time in the past year.
Director Confidence Index August 2024
Our August poll of U.S. public company directors finds tapering 2025 expectations.
