Commentators are fundamentally limited to educated guesses regarding what a Trump presidency might mean for corporate regulation given that the president-elect has never held an elected office and appears to be nominating several cabinet officials without government experience. Based upon campaign comments about “disastrous” U.S. regulations, however, it seems clear the president-elect will takes steps to lessen regulation, particularly in the financial industry and including an attempt to repeal or replace Dodd-Frank. It is almost certain that boards of directors will become less burdened with overseeing risk management and regulatory compliance. Needless to say, because certain regulations are relaxed does not mean that corporations will necessarily engage in a race to the bottom in terms of governance standards; boards will need to assess the cost-benefit of changing their compliance programs. This is particularly true if it appears that applicable regulations could change again in four years.
The president-elect also has the power to reshape key regulators including the Federal Trade Commission and the Securities and Exchange Commission. A Trump presidency will likely reverse the trend under the Obama administration of increased FTC review of mergers that have the potential to reduce competition, which may unfetter corporate boards from concerns over competition and concentration. In addition, Trump tapped former SEC Commissioner Paul Atkins to a key role in the SEC; Atkins has been critical of the policing of corporate auditors and other post-Enron regulatory measures meaning he could significantly lessen the corporate compliance burden on corporate directors.
While the banking industry may believe Trump’s deregulation agenda will boost their bottom line, including by lessening capital requirements, Julian Perlman of Ally Law member firm Phillips Nizer notes that many of the regulations Trump might seek to repeal were enacted in the wake of the Great Recession and in response to corporate conduct that exposed weaknesses in the financial system. Rely on your Ally Law member firm to keep you apprised of how the new U.S. administration’s actions may impact your corporate structure, policies, and procedure, and how best to respond. For more information about Ally Law member firm services and outstanding lawyers, contact us at email@example.com.