The year 2020 has been a wild ride and has brought a lot of adjustments to our world. I’m hoping we can leave much of it behind, but one thing we can count on carrying over is “change.”
For your organization and its leaders, one of the most important changes that will happen will be the reshaping of corporate regulations fueled by what appears to be playing out as new administration on Capitol Hill.
While healthcare remains a central policy issue, another item you should keep your eye on is the potential pressures on the role, responsibility, and composition of corporate governance. Time will tell what this will mean, but an active rulemaking agenda surrounding ESG (Environmental, Social and Governance) matters may be on the horizon and its implications will follow.
I’ve noted below a few aspects of the corporate landscape that are likely to experience a shift.
Corporate Governance & Social Responsibility
Campaign posture would indicate the potential new Biden administration will look to push proposals supporting corporate social responsibility concepts. It’s been noted with reference to the pandemic and climate change that “we have all recently witnessed in real time the market consequences of waiting until a crisis is upon us to respond.”
It’s expected that a priority will be placed on climate change disclosure requirements which could eventually apply to the private sector. Along the same line, policies will likely be floated to incentive companies to implement “socially progressive” initiative.
Regulatory Enforcement
History has shown Democratic administrations tend to identify areas to seek increased regulatory oversight. Per a Bloomberg analysis, it is widely expected that a Biden administration would look to reverse the current deregulatory approach pursued by the Trump-era.
In particular, SEC Inspections and Enforcement are at a 5-year low. Robust enforcement on Main Street and Wall Street with new disclosure requirements, investigations for misrepresentations and fraud, and deceptive trade practices would likely all see a spike in a much more aggressive Biden administration.
Employee Rights
Biden’s campaign continually pledged to address diversity and inclusion. I believe it’s fair to anticipate there will be a continued focus and new proposals around diversity, gender equality, and worker representation in board composition. Coupled with pandemic-related regulations (Families First Coronavirus Response Act) and active #metoo litigation, organizations should continue to give careful consideration on policies and procedures surrounding human capital.
Reach Out to Experts for Help Navigating the Changes
As the regulatory and social environment continues to evolve, your organization will need to be agile and prepared for change. Navigating the ripple effects caused by this can be complex. Holmes Murphy has the expertise to educate and protect your leadership from the unknown.
If you aren’t sure where to start or simply want to learn more, reach out to us! We have experts well-versed in Executive Risk and are happy to step in and provide support!
