WASHINGTON, Jan. 28, 2013 (GLOBE NEWSWIRE) -- Worries of the fiscal cliff and a sagging job market weighed heavily on directors' minds, leading to a small drop in economic confidence to 51.8, or 2.7 points, on the National Association of Corporate Directors' Board Confidence Index (BCI) in the fourth quarter of 2012. More than one-third of directors reported their companies had taken steps to prepare for 2013 and the possibility of an economic crisis, including reassessing corporate strategy (47%), increasing cash reserves (34%) and postponing hiring decisions (27%).
Predictions for the start of 2013 showed little optimism with an economic confidence level of 44—a negative outlook—for the next three months, a drop of eight points (15%) from the third quarter. For the full year ahead, the economic confidence level stands at 55—a positive outlook— though still down five points (8.3%) from the previous quarter.
Based on five key indicators, the NACD BCI offers a view of the state of the economy from the boardroom. Each quarter, directors from public companies are surveyed on the state of the economy. Scores above 50 are positive about the state of the economy, scores near 50 are uncertain and those below 50 are negative. For detailed metrics, methodology and historical data from the BCI, visit www.NACDonline.org/BCI.
"Although the last quarter of 2012 was the most pessimistic of the year, BCI data shows the overall economic outlook for all four quarters remained positive," notes Ken Daly, president and CEO of NACD.
While the start of the new year has many directors feeling pessimistic about the economy, a majority (66%) said their CEO was on track to meet incentive plan performance objectives for the fiscal year, and 60% said they were "very confident" or "confident" their CEO would meet incentive plan performance objectives for this fiscal year.
"Directors believe management has met its performance objectives for the year," said David N, Swinford, President and CEO of Pearl Meyer & Partners. "Now, they must focus on explaining to shareholders how those incentive plan objectives were set, why they will create long-value, and how the payouts align with sustained performance."
For additional insights on how the Q4 2012 BCI results will impact corporate pay practices, visit www.pearlmeyer.com/boardconfidenceindex.
About NACD
The National Association of Corporate Directors (NACD) is the only membership organization focused exclusively on advancing exemplary board leadership. Based on more than 35 years of experience, NACD identifies, interprets and provides insights and information that corporate board members rely upon to make sound strategic decisions, confidently confront complex business challenges and enhance shareowner value. With more than 13,000 corporate director members, NACD provides world-class director education, director training and proprietary research about leading boardroom and corporate governance practices to promote director professionalism and bolster investor confidence. Furthermore, to create more effective and efficient corporate boards, NACD provides independent board evaluations and custom-tailored in-boardroom education and training programs, as well as director-led conferences, forums and peer-exchange learning opportunities to share ideas about current and emerging issues. Fostering collaboration among directors and governance stakeholders, NACD is shaping the future of board leadership. To learn more about NACD, visit www.NACDonline.org. To join, please contact Kelly Dodd at kkdodd@nacdonline.org or 202-380-1891.
About Pearl Meyer & Partners
For more than 20 years, Pearl Meyer & Partners (www.pearlmeyer.com) has served as a trusted independent advisor to Boards and their senior management in the areas of compensation governance, strategy and program design. The firm provides comprehensive solutions to complex compensation challenges for companies ranging from the Fortune 500 to not-for-profits as well as emerging high-growth companies. These organizations rely on Pearl Meyer & Partners to develop programs that align rewards with long-term business goals to create value for all stakeholders: shareholders, executives, and employees. The firm maintains offices in New York, Atlanta, Boston, Charlotte, Chicago, Houston, Los Angeles, San Francisco and San Jose, as well as London.