Recent director views on economic challenges facing Australian businesses and government priorities

Director Sentiment Index (November 2014)
Australian Institute of Company Directors

NFP Governance and Performance Study (2014)
Australian Institute of Company Directors

Directors' views on economic challenges and government priorities

Company Directors is often asked about the views of the director community. We obtained directors' views on a variety of issues – including economic challenges facing Australian businesses and government priorities – in the context of:

• the Director Sentiment Index (DSI), Company Directors' biannual survey of over 500 directors of private businesses, not-for-profit organisations and ASX-listed companies; and
• the NFP Governance Study, Company Directors' 2014 survey of 2,700 not-for-profit directors.

While not a longitudinal study, the November 2014 DSI suggests that directors continue to believe that low productivity growth is the biggest economic challenge facing Australian businesses. Interestingly, directors perceive that there are increasing challenges for businesses in relation to (i) global economic uncertainty; (ii) low consumer confidence; and (iii) balance of power issues in the Senate. Concern in relation to these areas has grown since the May 2014 DSI.

Consistent with directors' concerns about low productivity growth, the survey also found that low productivity growth should be the key priority for the Federal Government to address in the short-term (ahead of taxation reform and infrastructure). This is the first survey in which infrastructure has not been rated by directors as the top priority that the Government should address in the short term. However, directors continue to believe that infrastructure should be the top long term priority for the Government.

The NFP Governance Study (October 2014), Australia's largest and most comprehensive study of governance trends in the not-for-profit sector, found that respondents believe that the top three priorities for the Commonwealth government in the not-for-profit environment should be (i) creating stability in government policy (which needs to be considered in light of the proposed abolition of the Australian Charities and Not-for-profits Commission); (ii) reducing the administrative burden on NFPs; and (iii) building sector capacity.