What’s on the Board Agenda? Uncertainty

With new tariffs, political volatility, and signs of a potential recession, boards are rethinking risk, strategy, and their role in navigating economic disruption.

As consumer sentiment dips and policy changes accelerate, board members are confronting a familiar but intensified challenge: making long-term decisions in a business environment that continues to shift. But as one respondent to the NACD Quarterly Survey: Q1 2025 shared, it is becoming increasingly “impossible to plan” for the future.

Prior to the unveiling of new US tariffs on Apr. 2, 2025, dubbed “Liberation Day” by President Donald J. Trump, and subsequent geopolitical and economic developments, NACD asked directors to select the top five business issues on their board agendas for the upcoming quarter. Seventy-five percent of respondents to the quarterly survey, in the field from March 13 to March 26, named shifting economic conditions as one of their top issues —up from 44 percent in the NACD Quarterly Survey: Q4 2024, which was conducted prior to Trump’s inauguration. Geopolitical volatility (46%) and political risk (41%) are also top of mind heading into the second quarter of 2025, followed by supply chain disruptions (32%) and artificial intelligence (32%).

Concerns about shifting economic conditions are widespread, especially given the impact of tariffs: 62 percent of the nearly 400 directors who attended the April 1 NACD webinar, “Trump Policy Agenda: Understanding New Risks and Opportunities,” project that the United States will be in a recession by the end of 2025, with 13 percent forecasting a severe recession. Additionally, out of the 299 directors who responded to the latest quarterly survey, 48 percent mentioned “tariffs” and 15 percent cited “recession” in their write-in comments.

As one survey respondent put it:

In their write-in comments, directors voiced concerns about potential ripple effects from the new trade policies, including increased uncertainty around inflation, market stability, future revenue growth, and consumer demand. One respondent warned that the uncertainty in financial markets and economic prospects “may result in caution and slow down new business.” Another worried that the current instability may impact funding for health-care companies due to “federal ‘whipsawing’ and [a] lack of predictable expenditures.”

Approaches to managing the risks that arise with these changes vary; some respondents are embracing a “wait and see” attitude, while others are prioritizing contingency planning and agility.

Nonetheless, the shared sentiment across survey respondents is that “chaos and uncertainty hurt business growth,” as one director noted, and the ability to plan for the long term is hampered due to the Trump administration’s unpredictable policy shifts.  

What Boards Should Know

On April 9, Trump announced a 90-day pause on what he termed “reciprocal” tariffs that had gone into effect hours earlier. However, a baseline tariff of 10 percent on all products imported into the United States, as well as 25 percent product-specific tariffs on imports of aluminum, steel, automobiles, and automobile parts, remain in effect.

The three-month pause is the latest example of shifts in the Trump administration’s policies that have left many frustrated with the “dizzying pace” of new regulations, as one respondent to the latest quarterly survey put it. Another described these policies, particularly those concerning tariffs, as “on-again, off-again, on-again.”

One director compared the back-and-forth nature of the tariffs to a rollercoaster, noting that they are “very concerned about the global market impacts” these levies may have. Another commented that the “global economic strain” from tariffs “could cause our usual allies to pull back and invest in other countries.” Others expressed dissatisfaction with the “near term back and forth regarding tariffs materially impacting operational planning” and “increasing costs significantly,” creating the need to move sourcing and production to avoid additional taxes.

While weary, directors would be wise to monitor further developments regarding major US trading partners. Of note, the United States has raised tariffs on Chinese goods multiple times, and they are now subject to at least a 145 percent tariff. In response, as of April 11, China imposed a 125 percent tariff on all US goods. Earlier, China had added 12 US companies to its export control list and six more US firms to its “unreliable entities” list.

Meanwhile, Canada and Mexico will not face the 10 percent baseline tariff. Instead, both countries are subject to a 25 percent tariff on any items that are not compliant with the United States-Mexico-Canada Agreement.

In this era of policy whiplash, board vigilance and adaptability will be critical. While directors should support executives without overwhelming them, boards should evaluate the resilience of their companies’ supply chains and their risk mitigation options. Boards should also consider engaging with third-party experts for guidance on the long-term implications of the current regulatory situation.

For more resources to help your board navigate the effects of the Trump administration’s policies on business, visit Navigating Changing US Policy: Key Board Implications.