Emerging Governance Safeguards Against US Political Risk, a new article by Stephen M. Davis on the Harvard Law School Forum on Corporate Governance, makes clear that US political risk is no longer an abstract concern for boards and investors—it is an immediate governance challenge. As presidential and state-level interventions increasingly target specific companies, Davis argues that political volatility now poses direct threats to enterprise resilience, board authority, and market stability.
Davis describes how this moment has transformed political risk from a largely macro concern into an unpredictable, firm-specific exposure. “The current political ecosystem presents volatility and highly idiosyncratic dangers and opportunities to different market parties,” he writes—leaving boards and investors “walking on eggshells” as long-standing safeguards like the business judgment rule lose their protective force. In this climate, leaders need more than intuition or ad hoc crisis management; they need structured, repeatable ways to anticipate, assess, and respond to political pressure, regardless of the who is in office.
The article highlights the growing importance of practical tools and governance resources designed to help organizations navigate this volatility. He points to the work of Third Side Strategies and the CPR Hub as examples of emerging, nonpartisan infrastructure for political risk mitigation— including the recently released Principled Influence: A Guide to Strengthening Public Affairs Practices in Polarized Environments, a step-by-step guide designed to help management teams take concrete steps to strengthen the governance of their external affairs in turbulent times by conducting a Public Affairs Governance Review. In today’s unstable political climate, Davis suggests, these kinds of toolkits are no longer optional: they are essential for boards and investors seeking to preserve trust, protect long-term value, and strengthen the civic conditions on which healthy markets depend.
Read more here: https://corpgov.law.harvard.edu/2026/02/05/emerging-governance-safeguards-against-us-political-risk/