July 31, 2019

Corporate Directors Speak Out on Political Uncertainty in the Trump/Brexit Era

In its latest report, the Diligent Institute interviewed corporate directors from around the world on the best way to approach board decisions despite political uncertainty.  Directors – under cover of anonymity – had much to say about the disruptions to business caused by the impending Brexit deal and by the political style of the US President.

Diligent Institute sought out corporate directors to help answer three key questions:

1. What makes political uncertainty a different, harder issue to handle now than in the past?

2. Is managing political uncertainty different from managing other kinds of risk, and if so, how?

3. And finally, what should boards do about political uncertainty?

Political uncertainty rose to the top of a list of issues directors told the Diligent Institute causing current governance challenges.  As one director remarked, “Political uncertainty is getting worse because we’re seeing far more dramatic left and right divisiveness everywhere; there are dramatic changes happening on both sides. That difference is not good for business.”

This divisiveness is fueled in part by the speed of communication, as one director pointed out, “The last time I remember really serious political uncertainty, the situation played out over the course of days, not hours. So social media, and the constant connectedness of everyone, means that everything gets crammed into a very short period of time and you don’t have long to respond.”

Among the tactics that boards are using to address political uncertainty are building a bench of in-house political expertise, diversifying board composition along political and demographic lines, and improving board evaluation and onboarding practices around political risk issues.  As one director put it, “part of your insurance for dealing with these big risks is the robust board level discussion you can have where people are coming at an issue from different places with different areas of expertise.

To learn how directors are tackling these tough questions, and gain specific strategies for dealing with political uncertainty in your own boardroom, download the full report, Governing Through the Fog: Corporate Director Perspectives on Political Uncertainty.