Anyone's Game: This year’s U.S. presidential election will likely be a photo finish. How should boards prepare?
By Maureen Milford

Former Vice President Joseph R. Biden perhaps made the understatement of the 2020 presidential election in a school gym a few miles from his home in Greenville, Del.

“Well, this is the most unusual campaign, I think, in modern history,” Biden said during a June speech on the coronavirus pandemic.

It’s likely that corporate directors are having similar thoughts as the United States reels from a seemingly endless coronavirus outbreak, prolonged civil protests, massive unemployment, deep partisan politics, foreign interference in the election and a recession.

The usual board playbook is collecting dust.

Generally, the CEO and senior leadership team collaborate with the board of directors to develop strategies to mitigate the risk and identify opportunities depending on the outcome of the election, says Thomas Sager, former senior vice president and general counsel of the DuPont Co. and now senior counsel at Ballard Spahr.

“This will be particularly true in this election given the wide disparity of positions taken by the two candidates,” Sager says.

Senior management also usually provides the CEO and directors with periodic assessments of the race, the key elements of both party platforms, the candidates’ likely focus and their potential impact if elected, he adds. Typically, the CEO and board chairman would then take the lead for the board, assisted by the public affairs vice president and occasionally in-house lobbyists. Companies are also aided by some outside “top guns” who have served on Capitol Hill, were members of a past administration or previously held office, Sager says.

Companies also rely heavily on organizations like the Business Roundtable, the National Association of Manufacturers and the U.S. Chamber of Commerce to collectively represent their interests, Sager says. Trade associations are also active in developing more targeted approaches. The National Association of Corporate Directors also keeps members up to date on all the latest developments in Washington. 

This election, however, could present corporate boards with risk factors that haven’t been experienced in modern history.

“Companies have begun to warn about civil unrest that could affect their businesses in SEC filings; this election only has the potential to make things worse. The virus may disrupt election administration, and there’s tremendous uncertainty related to mail-in balloting. We may not get results for weeks, and even when we do, there will be disputes about validity, all of which has the potential to inspire unrest and even violence,” says Ann Lipton, an associate professor in business law and entrepreneurship at Tulane University Law School.

Directors might be wise to take a page from their methods in handling the COVID-19 pandemic and network with peer companies.

A powerful lobbying force, the U.S. Chamber of Commerce could play an even larger role this election than in recent years by acting as a megaphone for corporate America. The Chamber was called “the single most influential organization in American politics, outside the Republican and Democratic parties’ apparatuses,” in Alyssa Katz’s The Influence Machine. According to Katz, the chamber in recent years has invested more than $1 billion in lobbying and campaign spending.

“For most directors and CEOs, politics is all risk and no upside, so avoiding it is the smartest thing they can do,” says Bradley Tusk, founder and CEO of Tusk Holdings and campaign manager for former Mayor Michael Bloomberg’s successful 2009 re-election as a third-term mayor of New York City.

Still, political strategists, scholars and corporate governance experts can offer some suggestions on how boards might prepare themselves for whichever of the three scenarios unfolds in November: President Donald J. Trump is re-elected; Biden wins; or the results of the election are contested at length.

For individual boards, though, it may just boil down to Sager’s simple recommendation:

“The best advice that I could possibly provide to a CEO or his/her [general counsel] is sponsoring something — a breakfast, lunch, reception or dinner — for either candidate. If you back the right one, absent a personal relationship with either one, you may get your phone call returned after the inauguration.”

Maureen Milford is a business writer based in Delaware.

2020 Third Quarter

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