25 Nov 2022

68% of directors expect decline in country's economic performance - survey

7:02 am on 25 November 2022

Institute of Directors chief executive Kirsten Patterson said a large number of boards were unprepared for a digital future. Photo:

More than two thirds of directors expect to see a decline in the country's economic performance, but are more positive when it comes to the outlook for their own organisations.

The latest director sentiment survey by the Institute of Directors (IOD) and ASB Bank was much more pessimistic than last year's survey with 68 percent expecting to see an overall economic decline, compared with 51 percent last year.

However 50 percent expect their own organisation to see an improved performance, with just one in five expecting to see a decline.

One in four directors also said their organisation's performance over the past 12 months had improved, due to their management of the pandemic.

"It is encouraging that a full quarter of respondents feel their pandemic response is now bearing fruit for their organisations, beyond simply riding out the storm," IOD chief executive Kirsten Patterson said.

Ongoing labour market constraints topped the list of risks facing organisations, while cyber risk slipped down the rank.

Two thirds (67 percent) of directors said labour quality and capability was the greatest risk to their organisation, which compared with just 30 percent last year and 14 percent in 2020.

Eighty-seven percent of directors said their boards had discussed strategic talent-related issues and risks, such as employee engagement, performance and retention.

Patterson said a large number of boards were unprepared for a digital future, which was a concern.

Just 54 percent of boards discussed their organisation's ability to manage cyber risk over the past year, compared with 60 percent last year.

Even fewer, 46 percent, discussed privacy practices and risks, the survey found, while just 37 percent of directors felt their boards had the right capability to lead their organisations into a digital future.

Managing consumer expectations ranked higher in the list of concerns with 60 percent of directors seeing market changes as a something boards needed to better understand.

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