The Director Sentiment Index survey for the second half of 2016 shows directors planning to get on with business despite global uncertainty dragging down overall sentiment.

    Director Sentiment Index: 2H161:08

    Now in its sixth year, the Director Sentiment Index is a key indicator of the issues that are important to AICD members and the wider director community. It is a driver for discussions on the economy, policy reform and corporate governance and is one way the AICD consults and engages members on advocacy issues.

    The latest survey, conducted in October, shows that business is planning to increase investment and boost employment over the next 12 months, despite global political and economic uncertainty seeing the overall sentiment among Australian directors drop by 5 points.

    Over the coming year, 34 per cent of directors expect their business to increase both staffing levels and investment. General business confidence has also increased by 10 points since earlier this year and is now at its highest level since 2013.

    While optimistic on the business outlook, a large majority of directors, almost 80 per cent, said the Federal Government is negatively impacting consumer confidence, and only 8 per cent believe the Government’s performance is having a positive impact on business decision making.

    On the policy front, directors remain concerned about a lack of infrastructure, taxation reform and the size of the federal budget deficit.


    • Directors identified global economic uncertainty (30 per cent), low productivity growth (26 per cent) and a slowdown in China (25 per cent) as the main economic challenges facing Australian business.
    • 71 per cent believe there is a risk-averse decision making culture on Australian boards.
    • Directors identified economic policy uncertainty (38 per cent), political instability (33 per cent) and short-termism (32 per cent) as the top three issues likely to disrupt their business over the next decade.
    • Directors have identified sustainability & long-term growth prospects (40 per cent), structural change/changing business models (26 per cent), corporate culture (23 per cent), business reputation in the community (22 per cent) and legal and regulatory compliance (22 per cent) as the issues most likely to keep them ‘awake at night’.

    The Index is statistically representative of the AICD membership with respondents from all sectors, including private business (43 per cent), not-for-profit organisations (33 per cent) and listed companies (11 per cent). Conducted bi-annually, the survey measures the opinions, current priorities, future intentions and expectations of Australia's directors and is the only indicator of its kind in Australia.

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