Despite so many unknowns, corporations are thinking about the clear possibility of a unified legislative and executive branch and how that will affect their policy approach and priorities.
Current polling suggests the Senate is a toss-up and that Joe Biden will be sworn in on January 20th. The question remains . . . how will Biden govern? Will he be a center-left consensus builder and work towards gaining bipartisan support? Which would lead to moderate policy changes. Or will he move toward the more progressive wing of the Democratic party?
The first priority of a Biden Administration must be a comprehensive stimulus package. After the blowback following the 2009 corporate bailouts – mostly to the financial services industry – it would be surprising to see individual companies receive government funds. However, entire industries are being decimated by the prolonged pandemic as state and local tax coffers are emaciated due to low tax revenue caused by struggling businesses and real estate.
Second, there could be bipartisan support push for major infrastructure funding tied to sustainability and undoubtedly rollback parts of the 2017 Trump tax cut. In particular, expect changes related to share buyback programs. Bailing out industries that used their tax cuts on share buybacks won’t sit well with a public suffering through a painful economic downturn.
Every institution from large corporations to NGOs will use the 78-day sprint between Election Day and Inaugural to understand which policies a new administration will put in place and refine how they will prepare and react. The smarter approach for those same organizations is to go out and listen to all of their stakeholders, understand their priorities, and put plans in place to respond. Policy process monitoring is a lagging indicator while community engagement is predictive. In this transition window, corporations should build on existing efforts, similar to JPMorgan’s recent announcement of a $30 billion investment to narrow the racial wealth gap.
Corporate leaders should internalize the promise of rising equality, as the push towards “Stakeholder Capitalism” will only become more important in a Biden-led America. A Biden administration is going to work with business, rather than just provide giveaways in the hope that philanthropy trickles down. The corporate world has fundamentally shifted. We will not go back to the way things were. Smart executives will look for opportunities to lead the way and not simply react to what is happening around them.