New Poll Finds Potential 2020 Economic Downturn a Top Concern for Corporate Directors

Survey by Corporate Board Member and Computershare and Georgeson, a Computershare company, finds business cycle worries the main issue keeping public company directors up at night in 2020.

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Corporate Board Member

Feb 06, 2020, 08:44 ET

STAMFORD, Conn., Feb. 6, 2020 /PRNewswire/ -- In a new poll of the nation's public company directors, nearly 60 percent of those surveyed said that when thinking about their company's growth in 2020, they are most concerned about the likelihood that a business cycle in its seventh year of expansion is poised for a downturn.

That's one of the key findings of the 17th annual What Directors Think survey, conducted by Corporate Board Member magazine, the independent voice of America's board community. Created in partnership with Computershare and Georgeson, the poll reflects the opinions of 269 board members at publicly traded U.S. companies.

The question of whether the U.S. economy is late in the economic cycle and about to head into a period of contraction has been looming over corporate decision-making for several months now. "While the indicators aren't pointing to a recession in the near term, everyone remains on edge because of the highly volatile environment," says Melanie Nolen, research editor at Corporate Board Member. "With a backdrop of political uncertainty, a public health emergency and ongoing trade tensions, it's not surprising that talk of a recession is giving management teams and their boards pause in determining the best path forward."

Surprisingly, the survey also finds that 54 percent of directors have become very concerned about the regulatory environment. They say it has become incrementally challenging for boards to anticipate and promptly meet changing regulatory standards due to inconsistency and unpredictability, especially in anti-trust authorities' application of those regulations.

"Work surrounding compliance and accountability seems to become more demanding for directors every year," says Jennifer Warren, CEO, issuer services, North America, at Computershare.

Just two years ago, when the 2018 What Directors Think survey asked the same question regarding top concerns in the boardroom, political stability and corporate tax rates ranked ahead of regulations on directors' list. This year, these same two issues rank third and tenth, respectively.

"The historical data from our survey shows that directors have always had some degree of apprehension over their ability to fulfill regulatory requirements, but it's the first time the issue has ranked as high on their list of concerns," says Nolen. "This is particularly interesting to observe against the current backdrop for business, considering that this concern is overshadowing other issues such as trade and the presidential election, both of which can have a material impact on future growth."

"Boards need to be composed in a way that ensures an understanding of risks surrounding regulation and other issues as well as a focus on corporate purpose and long-term strategy in order to be able to provide direction and oversight," says Warren. "While the onus is on companies to keep up with regulatory developments, directors can also make use of external experts to advise on changes in advance, helping ensure confident and timely decision making around compliance."

Also on directors' minds this year: nearly half of public company board members believe companies that incorporate ESG into their decision-making have greater success, but they continue to struggle with how to best measure the impact of these initiatives.

"As the focus on environmental, social and governance issues continues to evolve and proliferate, directors have a responsibility to ensure they are aware of every topic that impacts their company and industry," says Hannah Orowitz, managing director, corporate governance at Georgeson. "There is also a growing expectation that directors comprehensively understand pertinent ESG matters so they can discuss them with investors. Although some directors may already have expertise in this area, every board member has a general fiduciary duty to oversee the company's approach to ESG matters as a component of the company's business strategy."

The complete What Directors Think 2020 report is available for download at BoardMember.com/WhatDirectorsThink2020. It includes a host of data-driven insights, director opinions and expert considerations.

A webinar designed in conjunction with this research will also be held on February 20 to discuss the findings and provide additional insights into best practices for the year ahead. Visit BoardMember.com/WDTWebinar to learn more and register.

About What Directors Think
What Directors Think is a 25-question digital survey conducted each fall from August to October to take the pulse of what is top of mind in the boardroom and to provide corporate directors with benchmarks and best practices to assist them in their oversight duties. The findings are reported back to the governance community through a variety of channels, including an editorial report in Corporate Board Member magazine, a digital white paper, a webinar and peer discussions at event roundtables.

About Corporate Board Member
Corporate Board Member, a division of Chief Executive Group, has been the market leader in board education and the leading independent voice of America's corporate directors 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. Learn more at BoardMember.com

About Chief Executive Group
Chief Executive Group, the leading community for business leaders worldwide, publishes Chief Executive magazine (since 1977), ChiefExecutive.net, Corporate Board Member magazine and BoardMember.com, as well as conferences and roundtables that enable CEOs to discuss key subjects and share their experiences with their peers. CEG also runs the Chief Executive Network, the leading CEO membership organization arranged by industry, and facilitates the annual "CEO of the Year," a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers. Visit ChiefExecutive.net and BoardMember.com for more information.

About Computershare Limited (CPU)
Computershare is a global market leader in transfer agency and share registration, employee equity plans, mortgage servicing, proxy solicitation and stakeholder communications. We also specialize in corporate trust, bankruptcy, class action and a range of other diversified financial and governance services.

Founded in 1978, Computershare is renowned for its expertise in high integrity data management, high volume transaction processing and reconciliations, payments and stakeholder engagement. Many of the world's leading organizations use us to streamline and maximize the value of relationships with their investors, employees, creditors and customers.

Computershare is represented in all major financial markets and has over 12,000 employees worldwide.

For more information, visit www.computershare.com.

About Georgeson
Established in 1935, Georgeson is the world's original and foremost provider of strategic services to corporations and investors working to influence corporate strategy. We offer unsurpassed advice and representation for annual meetings, mergers and acquisitions, proxy contests and other extraordinary transactions. Our core proxy expertise is enhanced with and complemented by our strategic consulting services, including solicitation strategy, investor identification, corporate governance analysis, vote projections and insight into investor ownership and voting profiles. Our local presence and global footprint allow us to analyze and mitigate operational risk associated with various corporate actions worldwide. For more information, visit www.georgeson.com.

Corporate Board Member
Media Contact:
Melanie C. Nolen
+1 615.592.1169
[email protected]

Computershare, Georgeson
Media Contact:
Yin Chang-D'Arcy
+1 201.680.3464
[email protected]

SOURCE Corporate Board Member