The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.

A number of U.S. public companies have recently found themselves in a surprising place: trapped in visible and charged debates with politicians over internal corporate and investment policies.

And when those policies strike different chords across the political spectrum, it increasingly brings boards of directors into new realms of controversy.  Can this trap be avoided or has corporate policy forever become entangled in a continuation of politics by other means?  Will public companies be forced to declare red or blue allegiances to match the polarized political environment of red and blue states? And will investors follow suit?

For companies that want to keep away from both the political debate and the allegiance question, the path is challenging but should start with fiduciary duty basics: develop policies under a clearly articulable rationale that enhances shareholder value.  Doing so removes the central argument cited by some observers against, for example, ESG-oriented policies: that they support a cause rather than a business objective and thereby undermine the classic corporate purpose.

To read the full post, please click here.

For a PDF of the full memorandum, please click here.