WASHINGTON, Aug. 1, 2012 (GLOBE NEWSWIRE) -- Corporate directors expressed decreased confidence about the state of the economy in the second quarter of 2012, reversing two straight quarters of an improved outlook, according to the National Association of Corporate Directors' (NACD) Board Confidence Index (BCI).
A photo accompanying this release is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13888
The NACD BCI dropped nearly 13.5 percent in Q2 2012 from 60.6 to 52.4, suggesting that corporate directors are increasingly concerned with the direction and uncertainty of the economy. The NACD BCI also revealed that board members are increasingly uncertain about long-term prospects, with only 49 percent expecting economic conditions to improve in the next 12 months, compared to 61 percent in Q1 2012.
"The Q2 2012 NACD BCI results indicate that corporate directors' confidence in the economy is moving from cautious skepticism to increased concern," said Ken Daly, president and CEO of NACD. "While corporate directors are focused on the performance of their own companies, they are well aware of their industry, the broader markets, as well as concerns expressed about Europe and the looming possibility of a year-end fiscal cliff. The NACD BCI findings thus reflect a comprehensive view of the business environment."
In other findings, while 63 percent of respondents said their CEO is "on schedule" or "ahead of schedule" to meet incentive plan performance objectives for this fiscal year, this perspective represents a 16 percent decrease from Q1. However, 50 percent of respondents are "confident" or "very confident" their CEO will meet incentive plan performance objectives for this fiscal year, as compared to 18 percent of respondents who are "doubtful" or "very doubtful" that their CEO will meet such objectives.
"Only half the year is completed, and in many sectors Q4 has a disproportional impact on year end results—so the real test of CEOs' ability to meet 2012 performance targets, which generally are more demanding than corresponding 2011 targets, is still to come. The comfort in the findings to date is that relatively few companies have lost confidence in their ability to hit performance objectives in the second half," said David Swinford, president and CEO of Pearl Meyer & Partners.
NACD's Board Confidence Index (BCI) provides a snapshot of the state of the economy from the boardroom's perspective. During the month of June 2012, 127 public company directors responded to several questions regarding the state of the U.S. economy. For each question, there are five reply options, each assigned a point value: substantially better (100), moderately better (75), no change (50), moderately worse (25) and substantially worse (0). The point values are averaged for each question. Based on the scale, scores above 50 indicate a positive outlook about the state of the economy and those below 50 are negative. Scores hovering around 50 indicate little to no change in economic outlook in the view of directors.
To view the latest BCI data, please visit www.NACDonline.org/BCI. For additional perspective on how the Q2 2012 BCI results will impact corporate pay practices, go to 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 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 11,500 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 and San Jose.
