NACD's Board Confidence Index Indicates Economic Optimism

NEW YORK, Feb. 3, 2011 /PRNewswire/ -- U.S. corporate directors are optimistic about the economy's strength moving into 2011 and beyond, according to the quarterly NACD Board Confidence Index (BCI), a leading indicator of the health of the economy as viewed through the corporate boardroom lens. The Q4 2010 survey conducted by the National Association of Corporate Directors (NACD), Heidrick & Struggles and Pearl Meyer & Partners, revealed a gain in confidence of almost 14% compared to last quarter, and reinforces the positive assessment of the economy that President Obama offered in his recent State of the Union address. NACD's BCI for Q4 2010 rose to 64.4, reflecting a positive outlook about long-term economic growth amidst rising corporate profits and a rebounding stock market.

"Because directors often sit on multiple boards, they are uniquely prepared to provide insights into the state of the economy," said Kenneth Daly, the president and CEO of NACD. "NACD's Board Confidence Index is the only measure of its kind that provides a boardroom perspective on the nation's current and future economic health and illustrates the perception gap between what CEOs are thinking and what is on the minds of directors."

NACD's latest Board Confidence Index, compiled in collaboration with executive compensation consulting firm Pearl Meyer & Partners and leadership advisory and search firm Heidrick & Struggles, reflects the views of 370 leading corporate directors about the state of the economy and their own organizations' plans for the future. The data was broken down by company size and by specific vertical industries.

"While there is a stronger positive feeling as companies emerge from the crisis, we are still seeing some uncertainty in the shorter term, which may stem from an ongoing flux in the regulatory and political environments," said Ted Dysart, Vice Chairman at Heidrick & Struggles.

NACD's BCI shows that directors are optimistic about the long-term health of the economy. Almost three-fourths of the directors surveyed expect conditions to improve a year from now. Directors of the largest companies ($10 billion or more) were the most confident about future prospects. Smaller companies (under $1 billion), however, expect to do more hiring, with 42.3% saying they would expand the workforce, compared to only 34.4% of companies with $10 billion or more in revenue expecting to add workers.

"Continued economic growth and increased stock market prices have largely alleviated fears of a double-dip recession," said David Swinford, president and CEO of Pearl Meyer & Partners. "Business leaders also are more confident further out, largely because they see validation of economists' predictions that the recovery would be at best a slow, steady process."

Levels of confidence also varied by industry. Directors from the information technology and utilities companies anticipate that their industries will outperform the overall economy in the next 12 months. In contrast, directors in the healthcare sector expect their industry to perform "moderately worse" in the upcoming year. Directors from the materials and telecommunications industries generally believed their industries will perform similarly to the overall markets.

NACD introduced its quarterly Board Confidence Index last fall. The NACD BCI not only measures the level of confidence that corporate directors have in the overall economy, but also provides a glimpse of how directors feel about the state of individual industries and businesses. The results from the NACD BCI for Q1 2011 are scheduled for release in April.

For more perspective on how the Q4 BCI results will impact corporate pay practices, go to www.pearlmeyer.com/bci.

About NACD

The National Association of Corporate Directors (NACD) is the only membership organization delivering the information and insights that corporate board members need to confidently confront complex business challenges and enhance shareowner value. With more than 10,000 members, NACD advances exemplary board leadership. NACD is focused on creating more effective and efficient boards through director-led education and peer forums to share ideas and leading practices based on more than 30 years of primary research. Fostering collaboration among directors and governance stakeholders, NACD is shaping the future of board leadership. To learn more about NACD, visit NACDonline.org.  To join, please contact Kelly Dodd at [email protected] 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.

About Heidrick & Struggles

Heidrick & Struggles International, Inc., (Nasdaq: HSII) is the leadership advisory firm providing senior-level executive search and leadership consulting services, including succession planning, executive assessment and development, talent retention management, transition consulting for newly appointed executives, and M&A human capital integration consulting. For almost 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles' leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. For more information about Heidrick & Struggles, please visit www.heidrick.com.

SOURCE NACD