2020 Election implications: A board lens

Considerations for boards trying to model and assess what the new administration’s policy initiatives might mean for their companies and strategies.

November 20, 2020

The way it appears, the next president will be Joe Biden, and the Democrats will hold the House—but the struggle for the Senate continues. Should the Democrats win the two Senate seats in the Georgia run-off election on January 5, the Senate would be split 50-50, with Vice President Kamala Harris then casting any tie-breaking votes. If the Democrats lose one or both seats, the Republicans would control the Senate—with a split government.

What does this mean for executives and boards who are trying to model and assess what the new administration’s policy initiatives might mean for their companies and strategies in 2021 and beyond? What is realistic in terms of near-term policy initiatives for a new Biden administration?

Much hinges on Georgia’s U.S. Senate seats

If the Democrats win the two the Georgia Senate races, they would have formal control of the Senate. But many Democratic priorities would still face hurdles with no room for defection, and Democrats would likely need help from Republicans for many of the legislative initiatives outlined in the party’s Unity Platform.

Without bipartisan support, however, Democrats would have two procedural vehicles to move legislation forward with a majority vote: setting aside the filibuster (which at least one Democratic senator said he would oppose) and the budget reconciliation process. The budget reconciliation process was used to pass both the Affordable Care Act and the Tax Cuts and Jobs Act, and the Democrats could use it to pass key parts of the Biden agenda in areas such as an economic stimulus package and taxation. Of course, the Democrats would still face stiff opposition from Republicans, and there would be no room for Democratic defection. Also, there are limits on the types of legislation the budget reconciliation process can be used for in order to avoid the filibuster process.

If the Democrats win the two Georgia Senate races and take formal control of the Senate, as noted above, they may be able to use the budget reconciliation process to enact key parts of the Biden agenda, including a large economic stimulus package to help the economy recover from COVID-19 and to assist individuals and companies most in need. If Democrats fail to win at least 50 seats in the Senate, we will have mixed government, and bipartisan support will be required to get the 60 votes needed to pass legislation in the Senate. That will require negotiation and compromise, with each party giving up something in order to gain something.

Despite the potential for gridlock—particularly in a Republican-controlled Senate—President Biden may be able to achieve significant advancements in his agenda through the use of executive actions, as well as reregulation in key federal agencies, political appointments, and bipartisan legislation, where possible.

Change through executive actions

As to the importance of executive actions, The New York Times reported, “President-elect Joseph R. Biden Jr. is poised to unleash a series of executive actions on his first day in the Oval Office, prompting what is likely to be a years-long effort to unwind President Trump’s domestic agenda and immediately signal a wholesale shift in the United States’ place in the world.”1

The Times went on to report that:

In the first hours after he takes the oath of office … Mr. Biden has said, he will send a letter to the United Nations indicating that the country will rejoin the global effort to combat climate change, reversing Mr. Trump’s decision to withdraw from the Paris climate accord with more than 174 countries … He has vowed that on Day 1 he will move rapidly to confront the coronavirus pandemic by appointing a ‘national supply chain commander’ and establishing a ‘pandemic testing board,’ similar to Franklin D. Roosevelt’s wartime production panel. He has said he will restore the rights of government workers to unionize. He has promised to order a new fight against homelessness and resettle more refugees fleeing war. He has pledged to abandon Mr. Trump’s travel ban on mostly Muslim countries and to begin calling foreign leaders in an attempt to restore trust among the United States’ closest allies.

Given the significant impact of executive actions on specific industries—particularly foundational industries such as health care, energy (climate), and financial services—companies should have an inventory of Trump Administration executive orders that had the biggest impact on the company, and many of those orders are primed to be revisited in a Biden-Harris Administration.

Companies should also consider the potential for revisiting old regulations or creating new regulations as well as for stepped-up regulatory enforcement.

In addition to an economic stimulus package, other near-term policy initiatives of the new administration that should be the focus of board attention include tax reform, which may be part of the economic stimulus package; the U.S. Securities and Exchange Commission’s regulatory agenda (particularly new disclosure rules regarding environmental, social, and governance issues, sustainability, and corporate governance); as well as trade policy and climate-related regulation.

As we await the results of the Georgia Senate races in January—and recognizing that things will take some time thereafter to play out—boards should be having conversations with management and corporate counsel to:

  • Confirm that they have a pipeline of information on the Biden administration’s policy initiatives as they develop
  • Assess various scenarios of an economic stimulus plan, as well as tax, trade, and regulatory changes and their potential impact on the company
  • Reexamine the company’s risk profile and tolerance
  • Game-out economic scenarios based on potential policy changes.



1 Michael D. Shear and Lisa Freidman, “Biden Could Roll Back Trump Agenda With Blitz of Executive Actions,” The New York Times, November 9, 2020.

Receive the latest from KPMG Board Leadership Center

Board Leadership Weekly, Directors Quarterly, and more

Board Leadership Weekly, Directors Quarterly, and more