A Contested Election.

• Author: Milford, Maureen
• Position: THE AGE OF RISK: Political Risk

Of the potential results in November, a close election raises a significant wild card for boards of directors.

There has been some concern expressed that President Donald Trump may not concede if he loses to his challenger Joe Biden in a close election if he can raise claims about the legitimacy of the results.

"Very close elections always put the electoral system under stress," most recently in the 2000 election of George W. Bush versus A1 Gore, says Richard Hasen in his book Election Meltdown. "Bush v. Gore happened before the rise of social media and Trumpism. Since then, stress on the system has increased dramatically."

Corporate boards might want to prepare for the potential of drawn-out litigation, which could hinder corporate planning and risk mitigation because of uncertainty as to which administration will lead the country.

"I do think there is a chance of a protracted litigation struggle if the election is very close in a state that matters to the electoral college outcome," says Hasen, who is a professor of law and political science at the University of California, Irvine.

"Particularly if there is a divergence between in-person and absentee balloting results in a swing state like Pennsylvania that will report most of its in-person voting first, there's a risk of instability," should Trump raise claims of voter fraud, he says. "It is going to take a lot of attention to the procedures used for ensuring a safe and legitimate election to avoid such a contest leading to some political instability in the United States."

Since the two candidates are certain to have very different policy platforms as president--which could impact technology, gig-economy and fossil fuel industries, to name a few--such a contest over election results could leave boards of directors in a no man's land.

"We see how Facebook seems to have positioned itself in ways to be friendly to a Republican administration, and now is trying to shift gears in case the Democrats gain power," says Ann Lipton, an associate professor of business law and entrepreneurship at Tulane University Law School. "That's very difficult to navigate, especially now."

In terms of operations, Facebook, Twitter and YouTube are preparing how they will react if Trump questions the election's validity, according to The New York Times.

Adding to the unpredictability brew, Trump has been vociferous about his objections to universal mail-in voting. An NBC /Wall Street Journal poll in August found...