first_imgBusiness leaders in New England are cautiously optimistic about the local and national economies, according to a new survey conducted by the National Association of Corporate Directors New England Chapter (NACD New England). Seventy-eight percent of the boardroom directors and other business leaders surveyed believe that the U.S. economy will recover either significantly or slightly within the next 12 to 24 months. Only five percent believe the economy will worsen, and 16 percent expect it to remain the same.NACD New England’s 2009 Leadership Survey on Economic & Corporate Governance Trends surveyed 145 business leaders who serve on corporate or non-profit boards or hold other leadership positions at New England companies regarding the economy, as well as corporate governance issues including risk management, government oversight and boardroom diversity.”NACD members represent some of the region’s most influential business leaders, and they are optimistic about the national economy,” said NACD New England Chapter President William A. Earon. “Even more encouraging, the prevailing sentiment is that New England’s economy is stronger and will recover from the recession faster than the nation’s as a whole. These findings have positive implications for everyone who lives or does business in our region.”Sixty-three percent of the survey respondents believe the New England economy is stronger than the national economy, as opposed to 20 percent who see little difference between the two and 11 percent who feel the national economy is stronger than the economy in the region.The survey respondents also expect New England to recover from the recession before the rest of the country. Forty-two percent believe the New England economy will recover faster than the national economy, while an additional 34 percent expect the two economies to recover at the same pace. Just 15 percent see New England lagging the national economy in recovering from the recession.”These leaders who have a close pulse on business in this region seem confident in the New England economy’s ability to rebound from this recession,” said Ronald Skates, former president and CEO of Data General Corp. and a member of the NACD New England Chapter’s Board of Directors.The survey also produced findings in the areas of risk management, government oversight and boardroom diversity which suggest that New England’s business community is seriously confronting some of today’s most critical issues in corporate governance.Risk Management a Hot-Button TopicSurvey respondents highlighted the importance of risk management, as 52 percent said it is either the top priority or one of the top priorities of their boards. Forty percent said that risk management is important but not a top priority, while only seven percent said risk management is not a priority at all.When directors were asked for their opinions on federal regulation of corporate risk management, their responses were split. Forty- three percent think the U.S. government should regulate risk management, similar to how the Sarbanes-Oxley Act regulates accounting. But 41 percent believe government regulation is not necessary. Sixteen percent do not know or are not sure.Risk management was also listed as the leading concern for the audit committees of corporate boards of directors. When asked to list the top two challenges facing audit committees, 48 percent of the respondents cited an inadequate risk management program as the leading challenge.”These results show that Board members are very aware of the importance of managing risk at the Board level,” said Skates. “Though there is not a majority view in this survey that Boards are ready for regulation of risk management, it is good to see that Boards want to make managing risk a priority.”Mixed Support for Government Involvement, RegulationThe survey revealed mixed sentiment regarding how much power government should have in regulating the corporate sector, particularly in light of recent federal bailouts in the automotive and financial services industries.While 59 percent of respondents said they believe the economic stimulus package signed into law by President Obama will have a positive impact on the U.S. economy, only 25 percent said they believe that, given the current state of the global economy, the government should intervene in business.That sentiment was different when the questions focused on companies participating in the TARP. Eighty-eight percent of the directors surveyed believe the government should have a say regarding executive compensation at companies that received government bailout money as part of TARP. Of that 88 percent, 52 percent believe the government should have input but not control over executive salaries at companies receiving TARP funds. Thirty-four percent think the government should have both input and control.Diverse Skills Critical for a Successful BoardThe ability to assemble a board that possesses diverse skills is important to New England directors. An overwhelming 84 percent of the survey respondents see a need for boards to increase the focus they place on candidates’ skill sets and experience when selecting board nominees.Thirty-five percent of the survey respondents said that their boards are already comprised of individuals with diverse backgrounds. Fifty-two percent said their Boards are somewhat diverse, though most members have skill sets similar to those of their representative industries. Only 12 percent of respondents do not consider their boards to be diverse.About the SurveyThe NACD New England 2009 Leadership Survey on Economic & Corporate Governance trends surveyed 145 local members of public, private and non-profit boards. Each respondent was asked a total of 19 questions about the economy and issues surrounding boardroom leadership.For full survey results and for ready-to-use graphics, please contact Jim Connelly at 617- 861-3654 or via email at jconnelly@elevatecom.com(link sends e-mail).About the National Association of Corporate DirectorsThe National Association of Corporate Directors (NACD) is a not-for-profit membership organization devoted exclusively to improving director and board effectiveness in fulfilling their obligation to ensure shareholder and stakeholder value. Founded in 1977, NACD conducts educational programs and standard- setting research and provides information and guidance on a variety of board governance issues and practices. NACD’s 10,000 director members comprise both individual directors and entire boards ranging from the Fortune 100 to smaller public, private, and closely held companies. NACD distributes NACD Directorship magazine and provides governance information online at www.nacdonline.org(link is external).Source: NACD. BOSTON – July 6, 2009 –last_img

New England business leaders cautiously optimistic about NE, US economic recovery

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