U.S. public company board members are feeling better about the business environment today than they did three months ago, despite little resolution of issues weighing on business from geopolitics and trade policy to macroeconomic uncertainty and market volatility.
But their improved confidence stops short of signaling a clear upward trend for the second half of 2026.
In the Q2 Director Confidence Index, conducted June 3-8 by Diligent Institute and Corporate Board Member, directors rated current business conditions 5.9 out of 10, up from 5.6 in the first quarter. That 6 percent improvement brings directors’ assessment of current conditions back toward the range that has defined boardroom sentiment since the Index’s inception six years ago: not pessimistic, but not especially exuberant either.
Directors’ outlook for the year ahead is similarly restrained. Directors expect business conditions to remain essentially unchanged one year from now, at 5.9 out of 10. While that is flat with today’s environment, it is nevertheless up 8 percent from their Q1 forecast—a positive shift from 2025, when both current-condition ratings and forward-looking forecasts fell into the low- to mid-4 range.
“The Q2 findings suggest that confidence is stabilizing, not surging,” says Kira Ciccarelli, senior manager of research at the Diligent Institute. “That makes sense in the context of our GC Risk Index, where overall risk remains high. As long as risk levels remains elevated, confidence is likely to stay measured rather than fully rebound to pre-2025 levels.”
The findings also reveal divided perspectives across America’s boardrooms.
Thirty-four percent of the 104 directors polled say they expect business conditions to improve in the year ahead, while 35 percent expect little change and 32 percent expect conditions to get worse.
That split is consistent with the history of the Index. Director sentiment rarely swings to extremes. Even in stronger periods, their ratings of current conditions and forecasts tend to hover around the middle of the 10-point scale—a reminder that their role is to look around corners, test assumptions and weigh downside risk.
This quarter, uncertainty was a recurring theme in directors’ outlook: over policy and regulatory change, geopolitics, inflation and interest rates.
Among those expecting business conditions to deteriorate, comments often referenced inflation, interest rates, tariffs and global conflict. Optimistic directors cited some of the same factors but with a different expectation: that inflation pressures, rate uncertainty or policy disruption may ease.
“Current rate of inflation and awful federal executive leadership causing unprecedented volatility and uncertainty, along with real damage to the U.S. relationship in the world,” one director said, describing the causes for their current pessimistic outlook. But, they said, “I expect both of those to get better post-November.”
Most optimistic comments were similarly measured rather than exuberant. Directors who expect improvement describe their outlook in terms of stabilization rather than acceleration: better visibility, easing rates, more predictable policy, improving demand or a return to more normal operating conditions.
Other comments pointed to market risks. One director wrote, “I am worried about AI and the IPO boom. This could be a large overvaluation leading to credit issues.”
Others shared concerns about private credit and increasing consumer credit, the impact of AI on corporations and workforces, and a stagnant housing market. At the same time, some respondents pointed to growth opportunities and resilient strategies for navigating choppy waters.
Agility may help explain some of that divergence: smaller companies can often pivot more quickly as conditions change. Directors at companies with less than $500 million in revenue were more optimistic than larger peers, with only 17 percent expecting conditions to worsen.
In comparison, among directors serving companies with $5 billion to $9.9 billion in revenue, half expect business conditions to worsen over the next 12 months. For companies with $10 billion or more in revenue, 42 percent expect conditions to deteriorate.
Sector differences also point to an uneven environment. Directors at companies in the tech space are among the most optimistic, with an average 12-month forecast of 6.5 and 44 percent expecting conditions to improve. The most cautious reading appears in the power & utilities sector, where directors expect conditions to fall from 5.8 today to 5.2 a year from now.
Committee representation offers another lens. Risk committee members are more numerous in forecasting improvement: 47 percent say conditions will be better a year from now, compared with roughly one-third of directors overall. That does not necessarily mean risk committee members are less concerned. One possible explanation is that they are closely tracking the same set of issues now driving boardroom discussion: inflation, rates, geopolitical volatility, policy uncertainty and the resilience of the business model.
Taken together, the findings suggest a business environment that has steadied but not decisively strengthened. Directors are no longer signaling the same level of concern that characterized much of 2025, but neither are they forecasting a broad acceleration.
