Dealing with Uncertainty from the Boardroom

Uncertainty has always been part of the markets. The important thing is how we respond to it.

As someone who has worked in the capital markets and invested for decades, I have lived through many cycles. Bull markets, corrections, crashes, recoveries, you name it.

One thing I understand pretty well after all these years is this:

You never really know what the markets will do next.

There are countless models, analysts, and experts trying to predict whether markets will go up or down. Sometimes they are right. At times they are not. But uncertainty is simply part of the landscape.

What we do know is that opportunity exists in both kinds of markets.

When we are in a strong bull market, when everything seems to be rising, investing can feel easy. In recent years, many people simply needed to be in the market, perhaps through an S&P mutual fund or an ETF, and they did quite well.

But when markets correct, the conversation changes.

Suddenly investors begin asking different questions:

Should we sell?

How do we protect the gains we have made?

Where do opportunities exist now?

Technology, artificial intelligence, digital platforms, and micro-investing tools are opening doors that did not exist even a decade ago. If we were looking back at another point in history, I suspect investors then were having many of the same conversations we are having now, trying to understand change and figuring out how to adapt.

Early in my career as a stockbroker, I became fascinated with contrarian investors, people who looked for opportunity when others were worried.

One of the investors I have always admired is Warren Buffett. Along with his longtime partner Charlie Munger at Berkshire Hathaway, they demonstrated something that is sometimes overlooked today: patience.

They did not always rush into the newest technology or the earliest opportunity.

They did not invest in companies like Apple or Microsoft right at the beginning. They waited. They watched. They wanted to see proof that a business model worked before committing capital. I have been to many of the Berkshire annual meetings over the years and always learn so much from these icons. This year will be particularly interesting!

These conversations about markets are not limited to investors. They happen in boardrooms as well.

When directors meet, we spend time discussing the broader economic environment because it affects almost every aspect of a business.

Rising prices affect employees when salaries do not stretch as far as they once did. Increased fuel or transportation costs raise the cost of doing business. Inflation works its way through supply chains. Eventually those costs reach the consumer, and they affect the companies’ bottom line.

As directors, part of our responsibility is to think through possible scenarios and consider how external conditions might affect the company.

This time of year is especially important. Boards are reviewing year-end results from the previous year while also watching closely how the first half of the year is unfolding. When the environment shifts quickly, companies sometimes reconsider strategies that seemed perfectly reasonable only a few months earlier.

In the boardroom, our job is not to predict every market movement, rather to have a long-term view. Our job is to remain thoughtful, ask questions, and guide our companies through uncertainty with discipline and perspective. Markets will always move in cycles, but strong leadership helps companies navigate whatever comes next.

Your Champion for Getting Women on Boards,

Michele