Spotlight on Boards and Board Oversight of Business Strategy and Risk Management in a Post-Pandemic World

Martin Lipton is a founding partner of Wachtell, Lipton, Rosen & Katz, specializing in mergers and acquisitions and matters affecting corporate policy and strategy. This post is based on a Wachtell memorandum by Mr. Lipton, Steven A. Rosenblum, Adam O. Emmerich, William Savitt, and Karessa L. Cain.

In order to advise our clients we try to closely follow emerging and changing issues, developments and problems. In reviewing the matters we have been dealing with and the memos we have written in the past two years, we thought it would be helpful to list the high-profile stand-out issues for attention in the C-suite and boardroom that we have considered and discussed in our memos entitled Spotlight on Boards, Some Thoughts for Boards of Directors in 2021, and Risk Management and the Board of Directors.

  1. There is no true post-pandemic world. Viruses mutate at a rate that requires ongoing adjustments to address the situation as it develops. The pandemic experience will result in demand for major changes in all aspects of healthcare.
  2. The demand for inclusive capitalism continues to grow with greater demands for inclusion, diversity, equality, and social and racial justice.
  3. Climate change is likely to require even more substantial changes than presently recognized, as will other sustainability and long-term growth objectives.

  1. Cybersecurity efforts must be continually increased to stay ahead of cybercrime.
  2. The risk of mass personal injury liability continues to grow. Product safety and the introduction of new products need to take into account the massive personal injury class actions that are likely to be instituted in cases of product or service failures.
  3. Supply chains will need to continue to be adjusted to address technological, climate and political disruption.
  4. The interplay between human capital and technological changes like artificial intelligence will need to be managed.
  5. Focus will grow on the impact of internet social media on new areas like securities trading, and there is a potential for major legislative and regulatory changes affecting all internet social media and the way it presently interacts with other businesses.
  6. Businesses will be subject to the unstable local, national and international political situation, especially as it affects tariffs, taxes, the global financial system, supply chains and immigration (human capital).
  7. Management and directors will come under increasing pressure to reduce negative externalities and manage in the interest of all stakeholders, increasing the importance of enterprise-level risk management.
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