United States: Top 10 Topics For Directors In 2017: Political Changes

Political changes: Monitor the impact of major political changes, including the U.S. presidential and congressional elections and Brexit

The results of the U.S. presidential election are historic and unanticipated, and they will have significant economic, political, legal and social implications. As the nation prepares for the Trump administration, many uncertainties remain about how the incoming administration will govern. President-elect Trump has stated that he will pursue vast changes in diverse regulatory sectors, including international trade, health care, energy and the environment. These changes are likely to reshape the legal landscape in which companies must conduct their business, both in the United States and abroad.

While Trump has issued statements about the sweeping changes that he intends to make in his first 100 days in office, he is limited in his ability to act unilaterally through executive orders alone. In many areas and ways, as a matter of U.S. law, regulatory changes will require a process of public notice and comment, pursuant to the Administrative Procedure Act, before they can be implemented. Still others will require congressional legislation to comply with established statutes that constrain the President's power to act unilaterally.

Moreover, Trump's transition team has identified several candidates to fill the open Cabinet positions. These selections provide insight into how the new administration will begin to implement its policies in the months ahead, including the extent to which Trump will pursue his policy positions stated during the campaign. (See the Akin Gump 2016 Postelection Regulatory Report for more details about possible regulatory changes in a number of areas, including antitrust, cybersecurity, energy and the environment, financial services/investment management and international trade.)

With respect to Brexit, in an uncertain world, British Prime Minister Theresa May offers a little certainty: "Brexit means Brexit". Although it is clear that the United Kingdom will, very probably, leave the European Union (EU), there is no certainty as to when exactly this will happen, what the U.K.'s future relationship, if any, with the EU will be, or even what the opening position of the respective negotiators of the U.K. and the EU will be.

May has repeatedly stated that she will formally notify the EU of the U.K.'s intention to leave no later than March 31, 2017. This formal notification will trigger the now-infamous "Article 50," which will commence a two-year negotiation between the U.K. and the EU as to the terms of the U.K.'s exit. If, as appears likely, the U.K. Supreme Court confirms in January that PM May cannot make this notification through the exercise of the royal prerogative— or executive power—her government will have to force enabling legislation through Parliament in order to meet this timetable.

Once the negotiations do begin, it is likely that a clearer picture will begin to emerge of what the future relationship between the U.K. and the EU might be. Issues at stake will be wide-ranging. For business, the most pressing is likely to be whether the U.K. will continue to participate in any meaningful way in the European single market and, assuming not, on what basis the trade in goods and services between the U.K. and the EU can be conducted. The answer to this question will begin to inform the answer to many others—for example, the application of EU competition law and financial services regulation in the U.K., the imposition of customs tariffs, the ability of European nationals to continue to live and work in the U.K., and the freedom of the U.K. to enter into trade agreements with other non-EU countries. As negotiations progress, boards will need to be quick to assess the likely shape of any deal between the U.K. and the EU and to consider how to adjust their business model to mitigate the threats and take advantage of the opportunities that may present themselves

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