Trump tornado forecasting the Trump governance 'Windstorm': what boards should focus on--and ignore--in an uncertain regulatory environment.

• Author: Tahmincioglu, Eve
• Position: TRUMP TORNADO

Since President Trump took office, boards have been bracing for a weather change in corporate governance.

While many directors believe potential changes will be generally positive for Corporate America, the lack of certainty on what those changes will be is the biggest issue for board members.

The first months of the administration, says one board member, have been "like a windstorm, and its direction is uncertain."

The political maelstrom has many on edge and unclear on what to expect as far as tax reform, trade, regulations, immigration, healthcare, and infrastructure spending, explains James Cox, the Brainerd Currie Professor of Law at Duke University, who specializes in corporate and securities law.

"Regardless of whether you're in a red, blue or purple state, your business is going to be operating in an even more dynamic, hard-to-predict environment," he adds. "It's going to test the elasticity of the board when it comes to oversight."

Boards are opting to be patient

"I think most of us are still in a 'wait-and-see' mode," says Jill Kanin-Lovers, who sits on the boards of Heidrick & Struggles and the Homeownership Preservation Foundation. "Every day seems to bring a surprise but nothing tangible yet to help with business planning."

Indeed, the much-anticipated repeal of the Affordable Care Act surprisingly failed amidst political wrangling; and promises to gut Dodd-Frank may also fall short.

Business has a seat at Trump's table

The Trump administration's moves, while sometimes unpredictable, are partly informed by business leaders.

A host of CEOs for some of the largest global companies, including The Walt Disney Company, PepsiCo, Walmart and General Motors, among others, sits on Trump's business advisory panel along with other top business leaders, and the administration appears to be listening.

"I do believe they have open minds," says Steve Klemash, a partner at the firm who directs the EY Center for Board Matters, about the new administration. (EY's chairman and chief executive officer Mark Weinberger has a seat on the president's business advisory panel.)

Klemash adds, however, "I have no idea where they will go. It's complex; a lot of different variables."

Reassessing before readdressing

The general feeling has been "be alert and be aware, but don't stop doing anything you're doing," says Elaine Eisenman, who sits on the compensation committee for shoe retailer DSW Inc. and is a member of the advisory board for Women Corporate Directors Foundation.

While there has been talk of doing away with regulations such as the disclosure of CEO pay ratios, it's still unclear what will happen...