The U.S. Supreme Court’s 2023-24 term was among its most eventful and consequential of the century. In June and early July 2024, the Court issued several landmark decisions that injected considerable uncertainty into the federal regulatory landscape, including Loper Bright (which overturned 40 years of Chevron precedent) and Jarkesy (which greatly expanded defendants’ rights to contest certain regulatory actions in court rather than through administrative proceedings).
Legal observers believe these and other precedent-setting decisions will unsettle federal regulatory law for years to come, creating significant uncertainty for regulators and regulated entities alike. In this “new normal,” which occurs against a backdrop of unprecedented technological change, experts like Nygina Mills believe that sound corporate governance is more important than ever.
Here’s what Mills and other governance professionals believe public and private leaders should do to ensure their organizations remain strong in a rapidly evolving world.
1. Seek Legal Counsel on Regulatory Matters That May Affect Your Business
If your business is smaller or operates in a relatively lightly regulated industry, it may not have in-house counsel. If that is the case, it’s worth the time and expense required to seek reputable outside counsel on regulatory matters that could arise as your enterprise grows.
Think of this as a check-up on the health of your business. Not an annual physical, perhaps, but a battery of diagnostics and stress tests that aim to uncover under-the-surface weaknesses that could cause trouble in the years ahead.
If your industry is more heavily regulated or your legal check-up reveals significant downside risks from recent regulatory and jurisprudential developments, it may be advisable to hire in-house counsel for closer guidance moving forward.
2. Run a SWOT Analysis on the Current and Future State of the Enterprise
Next, run a SWOT analysis that looks at the strengths, weaknesses, opportunities and threats facing your business both in the present and in possible futures. A proper SWOT analysis is exhaustive, aiming to uncover hidden items (good and bad) that you and your team are not yet aware of.
Your SWOT analysis will, in turn, inform your corporate governance posture and inform the next steps in the process of hardening your business against the unknown.
3. Hire Experts to Address Competency Gaps
The gaps you’ve identified in your legal analysis and broader SWOT framework may require outside expertise to address. This comes at a cost, which stops any businesses from pursuing it, but remember that the risk of inaction is potentially far costlier. If the thought of hiring multiple outside experts seems daunting right now, consider a phased approach that addresses the most important needs first.
4. Develop Contingency Plans for Known and “Black Swan” Threats
Based on the results of your SWOT analysis and other internal risk-assessment efforts, develop scenario-based contingency plans for events that are reasonably likely to arise in the course of business as well as “black swans” that are less predictable but possibly more damaging. These plans should be detailed, structured, and based on input from a variety of internal and external stakeholders, including subject matter experts.
5. Create an Accountability Framework for Senior Leadership
Finally, develop a framework to hold yourself and other senior leaders accountable for instituting sound governance processes and adopting a risk-aware posture for the future. This work — both solidifying your organization’s governance and developing an accountability framework — will take time and will not be “done” after the first pass, so it’s crucial to begin now before the moment of true urgency arrives.
Capable Leaders Prepare for the Unexpected, Now More Than Ever
It will take years for the dust to settle from this year’s blockbuster Supreme Court decisions, to say nothing of the far more numerous regulatory changes resulting from congressional, executive branch and state government activities of late.
No matter how capable, no leader can anticipate every development arising from these changes. Nor can any leader predict with certainty the precise path new technologies like AI will take in the future.
However, sensible leaders can — and should — prepare for a more uncertain, disruptive business environment. Preparing for the unexpected will be more important than ever in a world where change seems to be the only true given.