According to a recent report, more than 60% of board directors are willing to take on additional risk next year. A survey found that many directors’ appetites for risk has been boosted by a number of factors. These include the prospect of falling interest rates and the availability of more ‘distressed’ sales. There is also a ‘feeling’ that prices for takeover targets are dropping. This has made deals more attractive and affordable, particularly in the case of distressed purchases.
Having said this, the survey also shows that some 18% of directors expect to become more cautious. The main reasons for this apparent fall in risk appetite are inflation and political instability. Despite being prepared to consider increased risk, directors have particular concerns about tensions in the Middle East and Ukraine. There is also worry about the risk of recession in major global economies.
iBOSS Comment:
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